Montana Property Taxes

Here’s a very quick primer on Montana residential property taxation. First, all houses in Montana are appraised at market value by the Department of Revenue (DOR). Let’s use, for example, a house appraised at $200,000.

To this amount, there is applied a “homestead exemption” with a rate of 34 percent. That rate is deducted from the appraised value – $200,000 less $68,000 – resulting in a taxable market value of $132,000.

A tax rate (3 percent) is applied, for a taxable value of $3,960. When the mill levy (which varies by city, county, and even school district but averages 538 mills) is applied to the taxable value, approximately half of the taxable value is the amount of property taxes due – in this example, approximately $2,000.

In this example, note that we started at an appraised value of $200,000 and ended with a tax due of $2,000, or 1 percent of market value.

That is a general benchmark for property taxation, which means that anything above 1 percent of market value for an annual tax bill is too high.