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Questions and answers about Montana’s new second-home tax

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Questions and answers about Montana’s new second-home tax


In an effort to lower property tax bills for homeowners and landlords who provide long-term rental housing, the state Legislature and Gov. Gianforte passed major tax relief legislation this year. As it’s implemented this year and next, the package will scale back taxes on most houses being used as primary residences while offsetting those cuts with higher taxes on most other residential properties starting in 2026.

As we cover the new tax policy, which the Montana Department of Revenue expects to boost second-home taxes by 68% on average, the MTFP newsroom is fielding many, many questions from readers. We’re compiling the most frequent ones — and the best answers we currently have — below.

We’ll update this story periodically as other questions roll into our inboxes and as officials release additional information on how the specifics of the new tax policy will work. As always, we’d love to hear comments and questions at news@montanafreepress.org.

Q: When will the second-home tax take effect?

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Interim rates will lower taxes for many residential properties on the tax bills sent by county treasurers this fall. However, the second-home tax won’t be implemented until 2026 tax bills, when it will raise taxes on most residential properties that don’t qualify for a “homestead” exemption.

Proponents had initially wanted to make the second-home tax effective this year, but added provisions for an interim year after negotiations on it dragged into the final days of the legislative session, missing the February deadline Gianforte had initially said would be necessary for the revenue department to implement the full policy this year.

Q: Who is eligible for the lower residential homestead rates?

A: Two types of residential property owners: Homeowners who live in their homes at least seven months a year and landlords who rent homes out on long-term leases for at least seven months a year. Long-term means leases that last at least a month, like the leases used for resident rental housing but unlike the terms for Airbnb-style short-term rentals.

Q: Will there be more property tax rebates?

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Yes. The Legislature also authorized a round of $400 rebates for homeowners, which will be available this year and apply against last year’s tax bill. Those follow the $675 rebates the Legislature authorized for homeowners in each of 2024 and 2023.

The new tax law requires the revenue department to mail a notice about the rebates to potentially eligible property owners by June 30. Eligible homeowners who meet the same seven-month occupancy standard that will be used for the eventual homestead exemption will be able to claim the rebate by applying between Aug. 15 and Oct. 1 this year.

Q: Do I need to apply to avoid paying the second-home tax?

Yes. When it takes full effect in 2026, the new law will assess higher taxes on any residential property that doesn’t qualify for the homestead exemption. Homeowners and landlords will need to apply to the revenue department for the exemption that will qualify them for lower rates.

Once homeowners are qualified for the homestead exemption, they will remain qualified until they sell the property, move elsewhere or apply for a homestead on a different residence. Landlords will need to periodically reapply to certify properties are still being used as long-term rentals.

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Additionally, homeowners who qualify for a property tax rebate this year will be automatically qualified for the homestead exemption going forward.

Q: How do I apply?

As of May 2025, the revenue department hasn’t yet published the necessary forms, but homeowners and landlords will be able to apply either by mail or online. The new law specifies that the application deadline for 2026 tax bills will be March 1, 2026.

The applications will ask property owners to formally declare that they’re using a property as either a principal residence or long-term rental. If the department discovers a taxpayer has fraudulently claimed the benefit, the law specifies that they will have to pay a penalty of three times the amount saved and be subject to potential criminal prosecution under a state law that can n result in a $500 fine and a jail term of up to six months.

Eligible homeowners and landlords who fail to apply for the homestead rates initially may be able to receive refunds if they appeal successfully after receiving higher tax bills.

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Q: I’ve heard there’s an exception for homes on agricultural land?

Yes. The tax package’s long-term rates place residential structures on agricultural land at their current levels regardless of whether they qualify as principal residences, an exemption intended to shield worker bunkhouses and other secondary residences in farm complexes from the second-home tax. That provision also means that second homes — including many high-value ones — located on qualified agricultural properties will be largely shielded from the second-home tax.

Separately from the second-home tax debate, revenue department officials and some lawmakers have expressed concern that it may be too easy to qualify undeserving properties for an agricultural status under current law, a process that currently requires reporting only $1,500 a year in agricultural income. A bill that would have tightened the qualification requirements for the agricultural designation, introduced separately from the property tax relief package, failed to pass the Legislature this year.  

Q: What if I run an Airbnb out of part of my home? Will that keep me from qualifying for the homestead exemption?

You’ll probably be fine. The bill doesn’t explicitly address this situation, but the definition of “principal residence” included in the law focuses on whether a taxpayer owned and occupied a given residential property for at least seven months of the year. It also says you can’t claim more than one property as a principal residence, but doesn’t say anything about what you’re doing with a property other than living on it.

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Q: Will family cabins pay the second-home tax?

A: Unless they qualify for the homestead reduction, yes. The new law doesn’t distinguish between family cabins owned by Montana residents and luxury real estate owned by out-of-state residents.

Q: Why doesn’t the second-home tax apply only to out-of-state residents?

Because that would likely be struck down by the courts as unconstitutional discrimination. As legislative attorneys studying tax issues for lawmakers have noted in the past, the U.S. Constitution includes several provisions that have been interpreted as limiting how much power states have to discriminate against nonresidents, particularly with regards to freedom of movement and economic activity. For example, a 1975 ruling by the U.S. Supreme Court barred New Hampshire from imposing higher income taxes on nonresident commuters.

There is some legal nuance involved — the Supreme Court, for instance, ruled in 1978 that Montana could charge nonresidents higher hunting license fees because hunting is a recreational activity involving a state-owned resource. Even so, most legal analysts seem to think lawmakers are on much firmer ground by pegging their definitions to how much time a property owner spends living on or renting a given property, rather than their state of residence.

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Q: Will the tax relief force local government budget cuts?

No — at least in theory. The way the state’s property tax system works means that most local taxes “float” to collect a given budget amount. As such, tax bills will generally shift around so lower homeowner taxes are offset by higher taxes on other types of property, primarily businesses under the interim rates for this year, then a combination of businesses and second homes in future years.

The legislation also includes a provision intended to avoid short-term revenue reductions for taxes defined in terms of non-floating mills, a category that encompasses voter-authorized local taxes in some parts of the state.

The other wrinkle is that two of Montana’s municipalities, population-121,000 Billings and population-350 Sunburst, have provisions in their charters that could keep taxes from floating to accommodate the downward valuation shifts produced by the relief legislation. That’s caused particular angst in Billings, the state’s largest city, and spurred lawmakers to include a provision in the tax legislation that purportedly overrides those charters to keep revenues constant. It’s unclear, however, whether that override attempt would survive a court challenge, so the bill includes another provision specifying the state will backfill municipal revenues to 2025 levels if the override clause is struck down.

Q: Where can I read the full second-home tax legislation?

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This is actually quite tricky. The new tax policy was passed as two conjoined bills with some redundant language and convoluted coordinating clauses for reasons that have to do with arcane legislative politicking.

If that doesn’t scare you off, start with Senate Bill 542 (text here). However, disregard SB 542’s sections 4 and 14, which were adjusted by provisions in House Bill 231 (its sections 29 and 27, respectively). Note that other coordinating language in HB 231 (its section 31) nullifies most of HB 231’s other contents to avoid redundancy with SB 542.

Q: I tried reading the bills and … how exactly do they provide me with tax relief?

We feel your pain.

Here’s a short answer: Lawmakers are adjusting statewide property tax rates to dial back the tax values for homestead-eligible residential properties. Montana’s property tax math translates your taxable value to your share of the collective bills for schools, roads, law enforcement and other local government services. So scaling down tax values for primary residences while boosting them second homes will shift taxes away from homeowners without defunding services.

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The shift will also raise taxes for some business properties — particularly this year, as the interim rates reduce taxes for primary residence before the second-home tax revenue is available next year. The measure does include a provision intended to limit the impact on smaller business properties. 

As for a longer answer? Stay tuned — we’re working on something.

Q: How much will my taxes change?

By the time the second-home tax is fully implemented in 2026, projections from the revenue department estimate the average owner-occupied home will see taxes decrease by 18% and the average long-term rental property will see a 22% decrease.

However, actual changes will vary place to place depending on factors including the composition of the local tax base and how specific counties, cities and school districts are managing their budgets. Bills for individual properties will also depend on shifts in the formal tax valuations due from the revenue department in the coming weeks.

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We wrote a separate story about the department’s projections, including visual breakdowns for different property types and county-by-county figures. It’s available here: How Montana’s new second-home tax could shift your property tax bill.


Have questions about the second-home tax and homestead? We’d love to hear from you — and plan to update this piece as new questions pop up and new information becomes available. Reach out at news@montanafreepress.org.

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Questions and answers about Montana’s new second-home tax

In an effort to lower property tax bills for homeowners and landlords who provide long-term rental housing, the state Legislature and Gov. Gianforte passed major tax relief legislation that will scale back taxes on most homes being used as primary residences while offsetting those cuts with higher taxes on most other residential properties starting in 2026. The MTFP newsroom is fielding many, many questions about new tax law from readers. Here are the most common ones — and the best answers we currently have.

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Former Montana Heritage Commission director sentenced in embezzlement scheme

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Former Montana Heritage Commission director sentenced in embezzlement scheme


Former Montana Heritage Commission Executive Director Michael Elijah Allen was sentenced Thursday to 10-years in the Montana State Prison with seven years suspended for stealing public funds from the state agency charged with preserving some of Montana’s most significant historic sites.

Lewis and Clark County District Court Judge Kathy Seeley said she took no pleasure in imposing the sentence but told Allen he was the brains behind this operation of years of theft and fraud. On a count of theft by embezzlement as part of a common scheme, Seeley sentenced Allen to 10 years at the Montana State Prison with seven years suspended, and imposed a concurrent, fully suspended 14-year term on a felony money laundering count.

“You have destroyed yourself,” Seeley said. “You understand that. I hope you do. This is not anybody but you that did this.”

Allen was ordered to pay $280,000 in restitution to the Montana Heritage Commission, plus a 10% administrative fee, and a series of standard court costs and fees, including a presentence investigation fee and victim-witness surcharge. He received credit for eight days previously served in custody, from Dec. 27, 2024, through Jan. 3, 2025, and was barred from having contact with the Department of Commerce or related entities as he serves his sentence under conditions laid out in a plea agreement.

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Prosecutors urged a stiffer punishment, asking the court to impose a 20-year prison sentence with 10 years suspended, arguing that Allen’s years-long scheme was a serious breach of public trust that demanded a lengthy custodial term. Deputy County Attorney Kevin Downs told the court that every defendant in similar embezzlement and financial-crimes cases submitted for comparison had received multi-year prison time and said a 10-year effective prison term was warranted to deter others from stealing public funds.

“He was the one that made this happen. He greased the wheels to steal from people,” Downs said. “This sentence sends a message to people. The people that work in any state agency, god forbid, that if you steal there will be significant consequence.”

Allen’s attorney asked Seeley for a lengthy but largely suspended sentence, arguing that a shorter period of incarceration — about two years, roughly double that imposed on co-defendant Casey Jack Steinke — would still hold Allen accountable while allowing him to work and pay restitution more quickly. The defense said Allen has suffered enough with the public humiliation and collateral consequences, including the loss of his career, voting rights and ability to serve on a jury or possess firearms.

Brenda Elias, chief legal counsel for the Montana Department of Commerce, told the court Allen had been a long-time state employee with significant autonomy as the Heritage Commission’s director and had been compensated for his work. She said Allen abused trust, manipulating people and resources.

“Hundreds of thousands of dollars that should have gone to preserve Montana’s heritage were diverted to Mr. Allen’s personal use,” Elias said.

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Elias said Allen served as executive director from 2012 to 2024 and said the Heritage Commission has never been financially self-sufficient, relying heavily on bed tax revenue and other support from the Department of Commerce.

“The Heritage Commission continues to realize the impact of these crimes to this day, and it will take many years for the Commission to recover,” Elias said.

Detective Nathan Casey of the Helena Police Department, a veteran investigator in financial crimes, testified that he was contacted by Commerce employees in mid-2024 after they uncovered significant irregularities, prompting a wide-ranging probe. Casey said investigators ultimately reviewed roughly 744 pages of documents which included invoices, contracts and procurement justifications tied to a state-issued purchasing card controlled by Allen.

According to earlier court records, Allen used his position as head of the Heritage Commission to channel roughly $350,000 in commission funds to Steinke between 2020 and 2024, often through invoices for work that was not legitimately performed. In addition to those payments, investigators found evidence that Allen used public money to cover rent, educational expenses and other personal costs, and that Steinke lived rent-free in Reeder’s Alley, one of the commission’s historic properties, during the scheme.

Steinke, who was charged with accountability for theft by embezzlement and felony money laundering, previously pleaded guilty to one embezzlement-related charge and the money laundering count under a plea deal that called for prosecutors to recommend a 20-year prison sentence with 15 years suspended. As part of that agreement, Steinke agreed to pay $100,000 in restitution, including a $20,000 upfront payment at sentencing.

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The embezzlement case comes as the Heritage Commission, which manages historic properties, is facing financial pressure. According to reporting from the Daily Montanan, the Commission is obligated to provide $1.1 million annually to the state but has only generated an average of about $750,000 in recent years, leaving less available for capital improvements than needed to maintain historic buildings.

Allen, 49, told the court he accepted full responsibility for his actions, saying he was ashamed and that the crimes were an aberration from how he had otherwise lived his life. He described the embarrassment his children have faced as his case played out publicly, and said he hopes to work and resume making restitution payments.

“I apologize to my friends and to my community,” Allen said. “I’m incredibly ashamed of the actions.”



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Montana delegation backs bill to release wilderness study areas

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Montana delegation backs bill to release wilderness study areas


Laura Lundquist

(Missoula Current) Most of Montana’s Congressional delegation is once again sponsoring a bill to remove three study areas from consideration as designated wilderness.

On Wednesday, Senators Steve Daines and Tim Sheehy and Rep. Troy Downing reintroduced Daines’ “Montana Sportsmen Conservation Act,” which would remove three wilderness study areas from wilderness consideration, releasing them to be managed as regular federal land. Rep. Ryan Zinke was not listed as a sponsor.

Two areas – the 11,580-acre Wales Creek and the 11,380-acre Hoodoo wilderness study areas managed by the U.S. Bureau of Land Management – are 40 to 50 miles east of Missoula in the Garnet Range north of Interstate 90. The third area, the much larger Middle Fork Judith wilderness study area, is around 81,000 acres managed by the U.S. Forest Service in the Little Belt Mountains southeast of Great Falls.

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Daines previously introduced the Montana Sportsmen Conservation Act in 2023, but it was never heard in committee. Now, he’s bringing it forward again, and he explained his strangely titled bill in a press release Wednesday.

“As a lifelong sportsman, increasing access to Montana’s great outdoors is one of my top priorities. The ‘Montana Sportsmen Conservation Act’ promotes our outdoor way of life by returning restrictive WSA’s to general public land management, which will improve wildlife habitat restoration, reduce the risk of catastrophic wildfires, and unlock better access to public land,” Daines said in the release.

It should be noted that neither hunting nor fishing are prohibited in wilderness study areas. In the past, sportsmen’s organizations have opposed the wholesale elimination of wilderness study areas. However, some have indicated they are considering the Wales Creek and Hoodoo areas could serve as political sacrifices to save other areas.

The wildfire risk in the Hoodoo area was significantly reduced this summer after the Windy Rock Fire burned a majority of the area.

Daines first proposed a similar bill – the Protect Public Use of Public Lands Act – in 2018 to release five Forest Service wilderness study areas, including the Middle Fork Judith. Former Rep. Greg Gianforte joined him but increased the number of wilderness study areas on the chopping block to 29, including those under BLM management. Both politicians had based their legislation off feedback from a select group of conservative counties and user groups, including the Montana Stockgrowers Association and the Montana Snowmobile Association. Other organizations protested the bills and the lack of transparency during the process.

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This most recent bill is supported by the Montana Logging Association, Montana Snowmobiles Association, Montana Outfitters and Guides Association, Montana Farm Bureau Federation, Great Falls Bicycle Club and the Judith Basin and Powell county commissioners.

In 1976, the BLM established 38 wilderness study areas in Montana, including the Wales Creek and Hoodoo areas. In 1977, the Montana Wilderness Study Act set nine Forest Service study areas aside for wilderness consideration, including the Middle Fork Judith. Federal evaluations of the areas conducted during the 1980s concluded some areas, including the three being considered in the bill, weren’t suitable for wilderness designation.

This year’s bill cites the 2020 BLM Missoula Office Resource Management Plan as justification for eliminating the Wales Creek and Hoodoo wilderness study areas. The plan said the two areas were unsuitable for wilderness designation.

However, the plan was not developed during “a 5-year collaborative process,” as the bill claims, but under the direction of the first Trump administration, which ignored a lot of public comments made during scoping. The three resource management plans for Missoula, Lewistown and Miles City were scheduled to be released to the public in late 2018, but they were delayed when the three offices were required to send the drafts to Washington, D.C., for review and revision. When they were returned and published in May 2019, all three draft plans heavily emphasized natural resources extraction.

A Pew Charitable Trust review of six BLM resource management plans drafted in 2019 found all “would fail to conserve lands that the agency’s own research has deemed worthy of protection; cut decades-old safeguards; minimally protect a fraction of 1% of the areas found to contain wilderness characteristics; and open vast swaths of public lands to energy and mineral development.”

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Several Montana conservation organizations protested the Montana plans, including Wild Montana and Backcountry Hunters and Anglers. When the draft plans were finalized in early 2020, some changes had been made to cater to sportsmen, but resource extraction still dominated. The Missoula Office’s new objective was to “produce the greatest quantities of forest products from vegetation restoration activities.”

The 2020 plans created a new designation – backcountry conservation area – that allows resource extraction but prioritizes the long-term maintenance of big game populations for hunting. The Missoula plan proposes to manage its three wilderness study areas as wilderness unless Congress releases them. Then, if Daines’ bill passes, portions of the wilderness study areas would become backcountry conservation areas: a 6,100-acre Hoodoos BCA and a 2,365-acre Wales BCA, according to the plan. The remainder of each area is open to any and all uses.

During the 2025 Legislature, the Senate Energy, Technology, and Federal Relations Committee voted 9-4 against a resolution calling on Congress to remove protection from Montana’s wilderness study areas. More than 3,300 Montanans signed a petition opposing the bill and supporting local solutions for study area management.

Some anticipate that more roads will invade wilderness study areas once they’re no longer protected. Zach Angstead, Wild Montana federal policy director, said Daines has countered those claims by saying the areas will still be protected under the Roadless Rule. But now, the Trump administration is on the verge of repealing the Roadless Rule, so that level of protection could disappear. And Daines strongly supports repeal of the Roadless Rule, according to a Dec. 5 email from a Daines spokesperson to the Flathead Beacon.

“Sen. Daines’ push to remove (wilderness study area) protections and roll back the Roadless Rule show that this isn’t about better local management – it’s about opening Montana’s public lands up to large-scale development to benefit corporations, not Montanans,” Angstead said in a statement. “Managing (wilderness study areas) properly requires local collaborative solutions developed by the people who know these places best. The people and the legislature have made it clear that Daines needs to give up this unpopular crusade to undermine and dismantle public lands and start taking his cues from real people who have been working to shape the future of (wilderness study areas).”

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Contact reporter Laura Lundquist at lundquist@missoulacurrent.com.





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Rare emergency alert issued as destructive windstorm batters Montana

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Rare emergency alert issued as destructive windstorm batters Montana


The National Weather Service in Great Falls issued a rare civil emergency message on Wednesday, December 17, 2025, as a destructive windstorm pummeled Montana from one end of the state to the other, with some of the strongest gusts recorded in central Montana.

The weather service expected wind gusts greater than 90 mph in Pondera, Teton, and Lewis & Clark counties, prompting the emergency alert that activated the wireless emergency alert system to send warnings directly to cellphones.

Rare emergency alert issued as destructive windstorm batters Montana

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“It can be used for weather or non-weather reasons. The primary reason why we deployed it today was to activate the wireless emergency alert system – WEA. That will allow these alerts to go to a person’s cellphone to take immediate action,” said Maura Casey, warning coordination meteorologist with the National Weather Service.

The civil emergency message was the first issued by the weather service since December 2020, during a similar wind and dust storm between Great Falls and Havre. The National Weather Service coordinates with county emergency managers to decide when to issue this rare alert.

What made Wednesday’s event particularly widespread was its prolonged nature and the strength of the accompanying cold front.

“This belt of wind came from the west and with how strong the cold front was accompanying it, it was able to reach down to the surface. What makes this event unique is it’s more of a prolonged wind event. It’s the entire day that we’re experiencing these strong winds,” Casey said.

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The windstorm didn’t just hit the plains. Some typically protected mountain valleys experienced destructive wind gusts, with 70 to 80 mph gusts recorded in the Helena and Gallatin valleys.

“The more complex topography make it a little bit difficult south of Great Falls. In this case, because we had that belt of winds that came right over Helena and Bozeman – they essentially had a closer access to that wind,” Casey said.

The powerful winds toppled semi trucks and trees across the region, and knocked out electricity to tens of thousands of people across the state.

Windstorm damage across Montana

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The destructive winds stem from an extremely active weather pattern that has been pummeling the Pacific Northwest with flooding rains, heavy mountain snow and high winds.

“We remain in the same very active Pacific weather pattern. While we have high confidence – maybe not as strong as today- but we will get more wind events in the coming weeks,” Casey said.

The weather service recommends staying prepared by keeping up with the latest forecast, especially given the active pattern that doesn’t appear to be going anywhere anytime soon.

This article has been lightly edited with the assistance of AI for clarity, syntax, and grammar.

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