Overview of Montana Taxes
Montana has relatively low taxes on residential real estate. The state’s average effective property tax rate is 0.87%, lower than the national average of 1.19%.
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To calculate the exact amount of property tax you will owe requires your property's assessed value and the property tax rates based on your property's address. Please note that we can only estimate your property tax based on median property taxes in your area. There are typically multiple rates in a given area, because your state, county, local schools and emergency responders each receive funding partly through these taxes. In our calculator, we take your home value and multiply that by your county's effective property tax rate. This is equal to the median property tax paid as a percentage of the median home value in your county.
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Jennifer Mansfield Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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Montana Property Taxes
Buying a house in Billings? Missoula? Helena? If so, it’s a good idea to get familiar with the Montana property tax system. Montana has relatively low taxes on residential real estate. The state’s average effective property tax rate is 0.87%, lower than the national average of 1.19%.
In part, rates in Montana are low because the system is structured to reduce the burden on homeowners. Owner-occupied residential properties are eligible for a 47% exemption, far higher than the exemption offered to commercial and industrial properties. Below we will take a closer look at that exemption and other important Montana tax rules.
And if you are buying a house in Montana, it’s also a good idea to familiarize yourself with the details of getting mortgage in the Big Sky State. You can find this information, along with details about rates on our Montana mortgage guide.
How Montana Property Taxes Are Calculated
Property taxes in Montana are based on your total tax rate and the taxable value your home. Taxable value is based on your home’s market value but is calculated by the state of Montana using a somewhat complicated formula.
First, property is reappraised by state assessors once every six years to match the current market value. If that reappraised value is greater than the previous value, the difference is phased in over the course of the following six years. That means there is a six year lag between your current market value and the value on which your taxes are based, which makes the impact of increases in taxes less jarring and more gradual.
Taxes on residential properties are also limited by the state’s residential exemption percentage. This rate changes annually but is generally between 40% and 50%. In 2014 the rate was 47%, which meant that 47% of the appraised value of a residential home was not subject to taxation.
After the exemption is subtracted the Montana statewide tax rate is applied to the remainder. This rate does not determine the amount you actually owe but rather the taxable value to which your total local rates will apply. In 2014 the rate was 2.47%.
For example, if your taxable market value after applying the residential exemption is $60,000, your final taxable value will be just $1,482 (that is 2.47% of $60,000). Your total state and local property tax millage rates (described in the next section) apply to that $1,482.
Montana Property Tax Rates
Tax rates in Montana are largely determined at the local level by cities, counties and school districts. The state also collects statewide taxes to support education. Tax rates are expressed in mills, or as millage rates. A mill equals $1 for every $1,000 of taxable value, while a millage rate is a mill expressed as a decimal. 1 mill is equivalent to a millage rate of 0.001.
For example, the statewide taxes are 95 mills for public schools and another 6 mills for higher education. In 2014, the average mill levy across all taxing districts in Montana was 559.85 mills.
While your tax bill will reflect a millage rate, a good way of comparing tax rates from one area to the next is an effective tax rate. This is equal to annual property taxes as a percentage of home value. The table below shows average effective property tax rates for every county in Montana.
|County||Median Home Value||Median Annual Property Tax Payment||Average Effective Property Tax Rate|
Yellowstone County is located in central Montana and contains the city of Billings. Tax rates in Yellowstone County are near the state average. The county’s average effective tax rate is 0.94%.
There are 28 different school districts in Yellowstone County and rates between the school districts can be significantly different. In the Billings School District the total rate for the 2015 fiscal year is 686.66 mills. Of that, 102.50 mills goes to the state, 168.12 goes to the city of Billings and 115.79 goes to the county.
The median annual property tax in Missoula County is $2,330, highest in the state. That is also about $200 higher than the national median. The city of Missoula has some of the highest taxes of Montana’s largest cities, with total mill levies of over 700 mills.
Located in northwest Montana along the western boundary of Glacier National Park, Flathead County has some truly beautiful real estate. It also has relatively modest property taxes. The average effective property tax rate in the county is 0.84%, slightly lower than the state average.
Gallatin County stretches from the tristate border with Idaho and Wyoming up to the city of Bozeman. It contains parts of the Gallatin National Forest and Yellowstone National Park. According to the U.S. Census Bureau the median home value in Gallatin County is over $261,000. That is the highest of any county in Montana.
While Gallatin County’s property tax rates are slightly lower than the state average, homeowners in the county still pay the second highest property taxes in Montana in dollar terms. Over half of all homeowners in Gallatin County pay at least $2,000 annually in property taxes.
The average effective property tax rate in Cascade County is 0.94%, 24th highest in the state. At that rate the annual taxes on a home worth $160,000 would be $1,504.
Lewis and Clark County
The sixth most populous county in Montana, Lewis and Clark County has property tax rates slightly higher than the state average. The county’s average effective property tax rate of 0.96% ranks as the 23rd highest rate in the state.
If you’re buying a home in Montana but don’t like paying property taxes, Ravalli County may be the place for you. The county’s average effective property tax rate of 0.63% ranks as the fifth lowest in the state.
Silver Bow County
The average effective property tax rate in Silver Bow County is 1.14%, seventh highest in the state. A homeowner whose home is worth $120,000 would pay $1,368 annually at that rate.
Situated at the southern end of Flathead Lake in northwest Montana, Lake County is the ninth most populous county in the state. The county’s average effective property tax rate of 0.78% is close to the state average. For tax year 2014 the average mill rate in the county was .6004, or 600.4 mills. Of that, about 190 mills were dedicated to schools.
The typical homeowner in Lincoln County pays $1,170 annually in property taxes. That is about $450 less than the state average and nearly $1,000 less than the national average.
Property Tax: Which Counties are Getting the Best Bang for Their Buck
SmartAsset’s interactive map highlights the places across the country where property tax dollars are being spent most effectively. Zoom between states and the national map to see the counties getting the biggest bang for their property tax buck.
Our study aims to find the places in the United States where people are getting the most for their property tax dollars. To do this we looked at school rankings, crime rates and property taxes for every county.
As a way to measure the quality of schools, we calculated the average math and reading/language arts proficiencies for all the school districts in the country. Within each state, these schools were then ranked between 1 and 10 (with 10 being the best) based on those average scores.
For each county, we calculated the violent and property crimes per 100,000 residents.
Using the school and crime numbers, we calculated a community score. This is the ratio of the school rank to the combined crime rate per 100,000 residents.
We used the number of households, median home value and average property tax rate to calculate a per capita property tax collected for each county.
Finally, we calculated a tax value by creating a ratio of the community score to the per capita property tax paid. This shows us the counties in the country where people are getting the most bang for their buck, or where their property tax dollars are going the furthest.
Sources: US Census Bureau 2016 American Community Survey, Department of Education, Federal Bureau of Investigation, State Police or Justice Department websites