This piece is adapted from the MT Lowdown, a weekly newsletter digest containing original reporting and analysis published every Friday.
If you’re fortunate enough to own a home in Montana, keep an eye out in the coming weeks for a reappraisal notice from the state Department of Revenue that will tell you how much the property value used to calculate your tax bill has changed over the last two years.
Given Montana’s soaring housing prices, those notices may cause a few heart attacks. Revenue analysts told lawmakers last November that they expected residential property values to increase by a whopping 43% on average between 2022 and 2023.
It’s tricky, however, to tell precisely how those higher property values will translate to tax bills. The state’s appraisal notices in many cases estimate that higher values will add hundreds or thousands of dollars a year to tax bills. However, those calculations use last year’s tax rates, which haven’t been adjusted to account for reappraisal. In theory, at least, widespread property value increases will grow local tax bases, meaning cities, counties and school districts could bring in the same amount of tax dollars with lower rates going forward. For taxpayers, that dynamic could offset some property value growth.
Here’s another wrinkle: The department’s projections expect residential values to grow faster than valuations for commercial and agricultural properties. That means this reappraisal cycle may pull tax burden onto homeowners from people and businesses that own non-residential property. And that’s all on top of how local government budgets are shifting as they try to maintain services amid high inflation.
A spokesperson noted last week that the revenue department plans to conduct a series of public meetings in July to give property owners a chance to learn more about their new valuations. A department info sheet explaining the appraisal notices is available here.
While rising property taxes have become an increasingly hot-button political issue, Montana lawmakers didn’t manage to negotiate a politically viable long-term fix for property tax pain during this year’s legislative session. The Republican-controlled Legislature did, however, approve a short-term measure: property tax rebates that will provide two-time relief of up to $675 a year for Montana homeowners on their 2022 and 2023 taxes.
Have questions about your reappraisal notice once it comes in? Are you a homeowner worried about what higher taxes mean for your family’s budget? A landlord pondering whether to pass higher taxes onto your tenants? Someone else who has insight worth sharing with other folks across Montana?
If so, we’d love to hear about it as we work to cover what the reappraisal cycle means for Montana taxpayers and the public institutions they fund. Email reporter Eric Dietrich at [email protected] or fill out this brief survey:
This story is published by Montana Free Press as part of the Long Streets Project, which explores Montana’s economy with in-depth reporting. This work is supported in part by a grant from the Greater Montana Foundation, which encourages communication on issues, trends, and values of importance to Montanans. Discuss MTFP’s Long Streets work with Lead Reporter Eric Dietrich at [email protected].
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