How to lower your property taxes in 2026

Important Property Tax Update

As your Montana real estate advisor, I want to make sure you’re positioned to keep more of your hard-earned money this year. 

Montana has updated how property taxes are calculated starting with the 2026 tax year. Properties that qualify as primary residences or long-term rentals can receive a reduced property tax rate, but you must enroll or verify your enrollment by March 1, 2026, or you could be taxed at a much higher rate by default.

What this is (and isn't):

This is a property tax classification, not the traditional Montana homestead exemption.

Montana has long allowed a homestead declaration filed with the County Clerk and Recorder to protect home equity from creditors (that’s separate from this new tax filing). 

This new requirement comes from the Montana Department of Revenue’s 2026 property tax reforms and is specifically designed to determine whether your property qualifies for a reduced tax rate on your tax bill.

Montana Homestead Exemption vs Homestead Reduced Tax Rate Filing

In other words:

✔️ The traditional Montana homestead declaration protects your equity from creditors (filed locally at the Clerk & Recorder's Office).

✔️ The Homestead Reduced Tax Rate filing (through the Department of Revenue) affects how much property tax you pay. These are two different systems.

Who Qualifies for the Reduced Property Tax Rate:

Primary Residence (“Homestead” under the tax law):

✔️ You live in the home as your primary residence for at least 7 months a year.

✔️ You (or your revocable grantor trust) are the owner.

✔️ You enroll by March 1, 2026 (unless you already received the 2025 homeowner property tax rebate and still own and live in that home).

Long-Term Rental Properties:

✔️ The property is rented out as a residence for leases of 28 days or more.

✔️ It is rented for at least 7 months of the year.

✔️ You (individual, entity, LLC, trust, etc.) own the property and apply by the same deadline.

If you don’t enroll and you otherwise qualify, your property may default to the higher non-qualified tax rate, meaning you lose out on potential savings.

Why This Matters for You:

This isn’t just a formality… it’s a financial decision! 

✔️ Qualified primary homes and long-term rentals could see significantly lower tax bills compared with properties classified as non-homestead.

✔️ Properties that don’t qualify (like second homes or short-term rentals not meeting the 28-day rule) could face higher overall tax rates starting in 2026.

What You Should Do:

By March 1, 2026:

Go to homestead.mt.gov to verify your enrollment status or submit your filing.

✔️ Confirm your primary residence qualifies and is enrolled,

✔️ Or enroll your long-term rental(s) to receive the lower tax rate.

If you already received the 2025 homeowner property tax rebate and still live in that home, you may already be enrolled (but it’s worth double-checking).

PS - if you need help locating your geocode, comment “GEOCODE."