Property Taxes Are In, and the Majority of Homeowners Are Paying Less

Nov 11, 2025

By MBPC Staff

The 2025 Legislature passed bipartisan property tax reform in the late days of the session. This legislation, a combination of SB 542 and HB 231, was negotiated by legislators on both sides of the aisle throughout the session, resulting in a real compromise.
The intricacies of how property taxation works in Montana require a complex understanding of our property tax system. Thus, this negotiation was ripe for misinformation. Even though property tax responsibility had been shifting from big businesses to homeowners and renters over the last few decades, business interests pushed back against re-leveling that balance. After numerous committee hearings and addressing concerns, the Legislature passed compromise legislation that shifted some property tax responsibility back to its original source.
Now that the 2025 tax bills are in, here is how property taxes stack up.

1. In every county in Montana, property taxes decreased on the median value home.
   Homes at the median in every county saw their property taxes fall. The median home value varies across counties. For example, in Carter County, the median value in 2025 is $107,000, compared to $578,000 in Flathead County and $685,000 in Gallatin County. In every county, taxes owed on a home at the median value went down. Median property taxes due fell by amounts ranging from $171 in Carter County to over $1,300 in Gallatin and Flathead Counties.
2. Eight out of 10 residential properties in Montana saw a decrease in property taxes in 2025 compared to 2024.
   Without the passage of this property tax legislation, 62 percent of residential properties would have seen their taxes increase, while only 13 percent would have seen tax decreases. Instead, 80 percent of Montana residences saw property tax reductions despite increasing property values in many areas.
3. Property tax increases affected 11 percent of residential properties, and these were homes with very high values or extreme valuation increases.
   The legislature established a tiered property tax rate structure, reducing tax rates for home values up to $1.5 million in TY 2025. By targeting property tax cuts toward lower and moderate value homes, the legislature could plow more of the property tax reduction into homes at or near the median value supporting everyday Montanans. For those with high valued homes, the value over $1.5 million will be taxed at a higher rate (these property taxpayers also see the benefit of the lower rate for the value up to $1.5 million).
   Property taxes are calculated by multiplying the market value by the tax rate to get the taxable value and then applying mills to that taxable value to get taxes due. The 11 percent of residential properties that are experiencing property tax increases in TY 2025 are either very high-value homes or are homes that experienced extreme valuation increases. For example, a residential home in Flathead County saw their valuation increase by 42 percent. As they had more value to tax, despite the decreasing tax rates, their tax bill went up by 10 percent, much less than it would have without the property tax legislation.
4. Legislators defeating the one bill that would have provided direct relief for renters of all ages
   Rising property taxes have made housing costs unsustainable for many renters and homeowners of all ages. Montana’s tight rental market has left nearly half of all renters (46.6 percent) cost-burdened. As renters pay property taxes through their rent, rising property taxes have made rent unaffordable for many Montanans.
   Tax credits targeted at Montana renters and homeowners who pay high effective property tax rates, such as those proposed in HB 154 in 2025, are the most effective tool to promote property tax affordability. Unfortunately, HB 154 did not reach the finish line, leaving more than 130,000 Montana renters without direct property tax assistance.

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