Most Montana homeowners should see a drop in property taxes after sweeping tax reforms go into effect this year. Renters, however, could see the cost of living rise. Lee Newspapers’ Victoria Eavis has been covering a tax code blunder and what it means for those living in buildings classified as “multifamily homes.” She sat down with MTPR’s Elinor Smith to go over the details.
Elinor Smith: Victoria, thank you so much for being here.
Victoria Eavis: Thank you for having me.
Elinor Smith: Of course. So to start off, can you explain what happened this legislative session. Why did lawmakers reform property tax code?
Victoria Eavis: Yeah, so in the last few years in Montana, homeowners mostly, saw their property taxes spike. Just in 2023, the people saw a median increase of 21% on their property tax bills. And so that's really put some strain on people and pushed some people out of their homes. So when we came into this legislative session, essentially at the top of the list was property tax reform — making the cost of living and property tax bills go down for Montana residents. It topped the governor's list of things to do, and it was clear they really had to make a big difference here.
Elinor Smith: And what mistake did they make in reforming this tax code?
Victoria Eavis: For the longest time, there was a tax rate of 1.35% applied to multifamily dwellings like apartment buildings, for example. They inadvertently rose that to 1.89 without realizing, is what legislators told me. And so when property tax bills started being sent out in the last few weeks, a few legislators caught it and kind of raised alarm bells about it.
Elinor Smith: You spoke to a Missoula-area property owner named Nate Tollefson. Can you tell me how this mistake will impact him?
Victoria Eavis: He said that on some of his properties, he saw a 35, 37, 40% increase in his tax bills. And it's going to sum to roughly $1.5 million more in property taxes for him this cycle. And, you know, he said that means he's going to have to raise rents.
Elinor Smith: Do we know how much of an increase renters are looking at as of right now?
Victoria Eavis: So that's the tough part is we don't really know. And from county to county and neighborhood to neighborhood, frankly, it'll look different. That's the tricky thing about property taxes in Montana. They can be slightly unpredictable. And it's important to note that property taxes are not just rates applied to the value of their home. They're made up of many, many things like, you know, what other type of housing or property is in your area and what type of local mill levees there are. Whether it's a public safety levee or, there was a big new fancy library put in by you. It's a conglomeration of a lot of things. And so until renters actually see increases in their property taxes that we really won't know how this is going to play out.
Elinor Smith: So Victoria, what types of buildings will be impacted by these rate increases?
Victoria Eavis: It's mostly multifamily, large, apartment buildings. What's really important is that these are high-value buildings, roughly over $2.4 million. And of course, depending on where you live, that can look different. But, you know, if you live in a large apartment building, chances are this is probably going to impact your landlord's property tax bill.
Elinor Smith: So lawmakers have discovered their mistake. Now what are they saying about the blunder?
Victoria Eavis: It depends on who you talk to. There are some lawmakers — namely Representative Llew Jones out of Conrad — he was the main architect behind these property tax bills. He's admitted the mistake, he has copped to it. But he's saying that in the nest legislative session, maybe they'll put in a rebate or some sort of incentive for landlords who don't raise their rent or who are willing to bring them back down. It's also worth noting that during the 2026 tax cycle, the tax code will change again and multifamily dwellings will see a much lower tax rate of 1.1%. And so I think he's kind of riding on that change in the tax code. But again, there are other lawmakers — Republicans and Democrats — who are saying we can't rely on landlords to bring their rents back down once the rate goes down in 2026. So they're expressing some concern about how this mistake will carry on past 2025.
Elinor Smith: Well, Victoria, if MTPR listeners want to find more information about this tax code mistake or more of your work in general, where can they find it?
Victoria Eavis: You can visit your local Lee newspaper. It's on the Helena Independent Record, Billings Gazette, Ravalli Republic and the Montana Standard. And, The Department of Revenue also has a lot of really great resources. They have a lot of tables on how the tax code has changed over the last couple years. And, my colleagues at other news publications in Montana also are doing great work on this.
Elinor Smith: Amazing. Well, thank you so much for being here today. I appreciate it.
Victoria Eavis: Thank you so much for having me.
