Some Montana homeowners are expecting to see a reduction in property taxes after the state enacted sweeping tax reforms this year, but the changes have created unintended consequences for renters.
The recent legislative session aimed to ease the burden on homeowners, who in recent years have seen property taxes surge. In 2023 alone, the median property tax increase reached 21%, prompting lawmakers to prioritize reform as a key part of the governor’s agenda.
However, a mistake in the legislation raised the tax rate on multifamily properties, such as apartment buildings, from 1.35% to 1.89%. This error has led to significant spikes in property tax bills for certain high-value buildings, in some cases exceeding $1.5 million in additional taxes for a single owner. Experts warn that landlords may pass these costs on to renters, potentially driving up the cost of living for tenants across the state.
The primary architect of the property tax legislation, Representative Llew Jones, a long-serving Republican known for voting with Democrats on key issues, has acknowledged the mistake. Jones, who has previously faced criticism for using his position on the appropriations committee to secure a $375,000 grant for a company owned by his wife, appears to be considering solutions.
Observers caution, however, that the full impact on renters is still uncertain. Property tax rates in Montana are influenced by multiple factors beyond simple mill rates, including property type, local levies, and neighborhood-level assessments, making the outcomes highly variable across the state.
The misstep has sparked debate among lawmakers from both parties over how best to mitigate the effects.