Montana Cuts Primary Residence Taxes but Raises Second Home Rates. She Inherited the Family Cabin. Montana Now Taxes It Like a Second Home

Montana’s 2026 property-tax law cuts primary residence rates but hikes taxes on second homes by 68%.

Governor Greg Gianforte signed legislation effective in 2026 that lowers property taxes on qualifying primary residences by about 18% while sharply increasing taxes on second homes and inherited cabins. This shift restructures the tax burden, particularly affecting heirs and snowbirds who cannot meet the seven-month occupancy or long-term rental requirements to qualify for the homestead exemption.

Owners must occupy a home at least seven months annually or rent it long-term to receive the reduced rate. Montana offers no special exemptions for family cabins, meaning inherited properties like a $780,000 Flathead Lake cabin owned by a Minneapolis retiree now face substantially higher tax bills. The state’s Department of Revenue projects these changes, and enrollment for the 2027 homestead tax year is open through March 1, 2027, with homestead status verifiable at homestead.mt.gov.

Montana’s tax law aligns with approaches in states such as Florida and California, emphasizing primary residence occupancy. For Montana’s heirs and seasonal residents, the new rules could shift financial incentives and estate planning strategies, especially given Montana’s single principal residence limit. Those holding family retreats might consider rental conversions or sales to mitigate tax impacts, reflecting broader challenges in balancing heritage property ownership and tax policy in a state known for its seasonal population shifts.

She Inherited the Family Cabin. Montana Now Taxes It Like a Second Home.
By Gerelyn Terzo, 24/7 Wall St.