How Much Is Property Tax in Montana?

Property taxes in Montana serve as a source of revenue for various local public services. These funds support schools, maintain roads and bridges, and provide services like fire protection and law enforcement. They also fund libraries, parks, and public health initiatives. This system ensures local governments have resources to operate and deliver services.

Understanding Montana Property Tax Calculation

Montana’s property tax calculation involves two components: the taxable value of a property and the local mill levies. The Montana Department of Revenue appraises properties to determine their market value, which is the estimated price a property would sell for. This market value is then multiplied by a state-determined property class rate to arrive at the property’s taxable value. For example, residential properties currently have a class rate of 1.35% of their market value.

Once the taxable value is established, local taxing jurisdictions apply mill levies to calculate the tax amount. A mill levy represents the tax rate, dollars per $1,000 of taxable value. For example, if a property has a taxable value of $5,000 and the combined mill levy is 100 mills, the property tax would be $500. The state legislature sets assessment rates, but local government entities determine mill levies.

Factors Influencing Your Property Tax Bill

Several elements contribute to variations in property tax bills across Montana. The market value of a property is a key factor, influenced by recent sales data, improvements, and its location. The Montana Department of Revenue regularly reappraises properties to update these values and reflect current market conditions. Reappraisals occur on a set cycle, with residential and commercial properties reappraised every two years.

The mill levies applied to a property’s taxable value also impact the final tax bill. These levies are set by local taxing jurisdictions, including county, school, and city governments. Special improvement districts, such as those for fire, water, or sewer services, can also impose their own mill levies. This combination of localized levies causes property tax rates to differ considerably between communities, or even within different areas of the same county.

Property Tax Exemptions and Relief Programs

Montana offers several programs to reduce the property tax burden for eligible homeowners. The Property Tax Assistance Program (PTAP) provides relief for low-income homeowners on their principal residence. Eligibility for PTAP is based on income limitations, which are adjusted annually, and can reduce the taxable value of a qualifying property.

The Disabled Veteran Property Tax Exemption offers tax relief to qualifying disabled veterans or their surviving spouses. This exemption can reduce the taxable value of the veteran’s primary residence, with the benefit tied to the veteran’s disability rating. The Elderly Homeowner/Renter Credit provides a refundable income tax credit for older Montanans who meet age and income requirements, helping to offset a portion of their property tax or rent paid.

Assessment and Payment Process

The Montana Department of Revenue is responsible for appraising all real and personal property at 100% of market value. Property classification and appraisal notices are mailed by the Department of Revenue, informing owners of their property’s valuation. The state mandates a two-year reassessment cycle for all real property to ensure equitable tax distribution.

Property tax bills are sent by county treasurers, who combine state appraisals with local governing body budgets. Property tax payments in Montana are due twice a year, with the first installment by November 30 and the second by May 31 of the following year. Payments can be made through online portals, mail, or in-person at the county treasurer’s office. If a property owner believes their valuation is incorrect, they can appeal the assessment through an informal review with the Department of Revenue, followed by a formal appeal if necessary.