Montana Property Tax Proposals Under Review: MT HB 231

Montana’s Legislature is currently reviewing House Bill 231 (“MT HB 231”), a proposal aimed at revising property tax rates for commercial properties. This bill introduces a tiered tax rate system, which could significantly impact commercial real estate owners across the state.

Key Features of MT HB 231

Tiered Tax Rates: The bill proposes lower tax rates for smaller commercial properties, reducing the rate from 1.89 to 1.5%. However, larger commercial properties that do not qualify for the homestead rates would see an increase to 1.9%.

Homestead Exemption: The bill also includes provisions for primary residences and long-term rentals, lowering their tax rates from 1.35% to either 0.9 or 1.1%, depending on their value relative to the statewide median.

Impact on Commercial Real Estate Owners

Financial Implications: Owners of smaller commercial properties may benefit from reduced tax rates, potentially lowering their overall tax burden. Conversely, owners of larger commercial properties could face higher taxes, impacting their profitability and investment strategies.

Market Dynamics: The tiered tax system may influence property valuations and transaction volumes. Higher taxes on larger properties could discourage investment and reduce market activity, while lower taxes on smaller properties might stimulate growth in that segment.

As Montana lawmakers continue to debate MT HB 231, commercial real estate owners should stay informed about potential changes and prepare for the financial and strategic adjustments that may be necessary.