02/19/2026
Real estate taxes in Montana are increasing significantly in 2026 for short-term rentals and homes other than your primary residence.
If you own a primary residence (e.g., if it's your principal residence 7+ months per year) or a long-term residential rental (e.g., you lease it out 7+ months per year) those properties will be taxed at the higher tax rate applicable to short-term rentals and second homes unless you file the appropriate application with the Montana Department of Revenue (DOR) before March 1, 2026.
There is some nuance to this, which is why we suggest you see the DOR's two FAQ pages (below) for answers to common questions. There you can also find the link to file your application online.
-FAQs/Link for Primary Residences: https://revenue.mt.gov/property/property-tax-changes/homestead-faqs
-FAQs/Link for Long-Term Rentals: https://revenue.mt.gov/property/property-tax-changes/rental-faqs
Other resources: https://revenue.mt.gov/property/property-tax-changes/
A note of caution: The DOR may audit you, as there are potential civil penalties and/or criminal charges if the DOR determines your application was fraudulent or your property was incorrectly classified. At a recent presentation a high-level government official indicated the DOR will likely rely on the Montana Supreme Court's decision in Ruby Mountain Trust, et al vs. DOR to evaluate whether a purported long-term lease is, despite being 7+ months long, a "sham" lease. As noted in the final FAQ on the long-term rentals page above, the law is not crystal clear regarding when a long-term lease will be respected vs. invalidated. But I imagine the DOR will, at a minimum, evaluate (1) whether fair market rent is charged and actually paid under the lease, and (2) the facts and circumstance of the particular deal--e.g., is it an intra-family lease, do the tenants regularly use the property, does the landlord regularly use the property during the term of the lease, etc. Here is a link to the Ruby Mountain Trust decision: https://law.justia.com/cases/montana/supreme-court/2000/beb6023e-3941-4fb2-af58-373149c4ab26.html
Time will tell how this plays out, as lawsuits have been filed challenging the legality of the bills adopted in the recent legislative session that created these tax changes.
THE MAIN POINT: Please use the above resources to carefully evaluate how your property should be classified and, if it is properly classifiable as your primary residence or a long-term rental, make sure you file your application before the March 1 deadline.
