The Montana Governor’s office announced that Gov. Greg Gianforte has signed two significant bills to implement his property tax relief package. This legislation aims to lower property taxes for Montana homeowners and long-term rentals. It will offset costs by increasing taxes on second homes and short-term rentals like Airbnb properties. The announcement, made through an email, stated that 183 bills were recently signed by Gianforte.
In a statement, the governor expressed pride in delivering “meaningful and permanent property tax relief for Montanans.” His spokesperson, Sean Southard, credited legislators who supported this initiative. Gianforte has been a proponent of the second-home tax, an idea he championed during his re-election campaign. The measure, called a “homestead” initiative, seeks to aid permanent residents while increasing taxes on second homes, which are often owned by out-of-state residents who don’t pay Montana income taxes.
The Montana Department of Revenue estimates the law will decrease homeowner taxes by an average of 18% starting in 2026. Conversely, taxes on second homes and Airbnb-style rentals could rise by 68%. The effect on individual property owners will vary based on property value, local tax compositions, and municipal budget decisions.
House Appropriations Chair Llew Jones, R-Conrad, developed the legislation. It emerged from a property tax task force established by Gianforte last year. The final versions of the bills, House Bill 231 and Senate Bill 542, were passed with bipartisan backing despite opposition from some Democrats and hardline Republicans. Critics argue the tax could unintentionally affect certain Montana residents if they fail to declare their homes as primary residences.
Industry groups have voiced concerns, fearing the shift of taxes to larger business properties. The relief package modifies tax rates that determine a home’s taxable value. While it aims to relieve residential properties, the changes could raise taxes on other properties. The second-home tax divides residential properties into two categories, with higher rates for second homes and short-term rentals. This strategy attempts to cushion business properties from tax increases.
The package also aims to favor lower-value homes for tax relief by applying varied rate tiers. It adjusts rates for agricultural and commercial properties, lowering rates on smaller commercial entities to protect small businesses. From 2026, homeowners must apply for a “homestead” exemption for lower rates. If they fail to apply, they can appeal if affected adversely by higher tax bills.
Initially, Gianforte urged swift legislative approval to allow the revenue department to implement the second-home tax. As discussions extended into the session’s final days, interim rates and a $400 rebate were added to assist taxpayers until the full package’s 2026 implementation.
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