Montana Property Tax Relief: Key Updates for Homeowners and Landlords (2025-2026)

If you own a home or a rental property in Montana, you’ve likely felt the sting of rising property valuations. But there is good news on the horizon. The state has overhauled its property tax structure to differentiate "Long-Term Rentals" and "Homesteads" from short-term rentals and vacation homes.

New tax classifications for the 2026 Tax Year offer significantly lower tax rates for eligible properties—but only if you are correctly classified.

Here is what you need to know to secure your tax relief, including a critical deadline that just opened this week.

1. The "Long-Term Rental" Tax Break

For landlords renting to Montana residents.

This is the biggest change for investors. Historically, rentals were often taxed similarly regardless of lease length. Now, the state wants to incentivize housing for locals. If you operate a long-term rental, you can qualify for a much lower tax rate (the same rate as owner-occupied homes) compared to short-term vacation rentals.

• The Benefit: You pay the reduced residential tax rate (tiered rate) rather than the higher commercial/second-home rate (flat 1.9%).
• Who Qualifies?
• You must rent the dwelling for periods of at least 28 days.
• The property must be rented for at least 7 months of the year.
• Tenants must occupy the dwelling as their residence.
• Action Required: You must apply to receive this classification. It is not automatic.
• Application Window: December 1, 2025 – March 1, 2026.
• Where: Apply online via the Montana Department of Revenue’s TransAction Portal (TAP).

Important Note for Landlords: If you own a multi-family unit (like a fourplex) where you live in one unit and rent the others long-term, you can potentially classify the entire property under these favorable rates.

2. The "Homestead" Classification

For homeowners living in their primary residence.

This classification ensures you pay the lower, tiered tax rate on your primary home.

• Who Qualifies?
• You own the home and live in it as your principal residence for at least 7 months of the year.
• Do You Need to Apply?
• Maybe No: If you applied for and received the Property Tax Rebate (the $400 check) in 2024 or 2025, you are likely automatically enrolled for the Homestead classification for 2026.
• Maybe Yes: If you bought your home recently, missed the rebate deadline, or did not qualify for the rebate for technical reasons (but still live there), you must apply manually.
• Application Window: December 1, 2025 – March 1, 2026.

3. Additional Relief: Elderly Homeowner/Renter Credit

For seniors with household incomes under $45,000.

Many seniors overlook this refundable tax credit, which can be claimed even if you do not owe income tax.

• The Benefit: A refundable credit of up to $1,150.
• Eligibility:
• Age 62 or older.
• Lived in Montana for at least 9 months of the tax year.
• Gross household income less than $45,000.
• Action: This is claimed on your Montana income tax return (Form 2EC). You can often claim this retroactively for up to 5 years if you missed it previously.

Next Step

Visit Montana Department of Revenue (revenue.mt.gov) immediately to verify your property's current classification status. If you see your property listed as a "Class 4" residential but not specifically flagged for the Homestead or Long-Term Rental reduced rate, verify if you need to file the application via the TransAction Portal before March.