If you are shopping Billings this summer, the number on the listing sheet is only half the price. The other half is decided by a form the state stopped accepting on March 20, and by a legal argument between the city and its own 1977 charter that has not been fully resolved. Both of those things now sit between you and the tax bill that arrives in your mailbox next November.
This is the piece of the Billings market that Bozeman and Missoula buyers do not have to think about, and that no national portal explains. It is worth ten minutes before you write your next offer.
The same house, two very different bills
Montana rewrote its residential property tax structure in 2025 through House Bill 231 and Senate Bill 542, and the second phase lands on the bills mailed this fall. Graduated tax rates apply to residential properties beginning in 2025, with dividing lines for residential property at $400,000 and $1.5 million. The rates are 0.76% for the first $400,000 in value and 1.10% for the value above that, with the top tier reaching 1.90%. That tiered treatment only applies if the home is enrolled as a primary residence or a qualifying long term rental. Every other residential property is taxed at a flat 1.90%.
The Department of Revenue's own projections tell you how large the gap became. Initial projections estimated that, once the second-home tax is fully implemented in 2026, the average owner-occupied home will see taxes decrease by 18% and the average long-term rental property will see a 22% decrease relative to its 2024 tax bill, while taxes for the average home that does not qualify for the homestead exemption would likely rise by 68%.
Read that again with a Billings address in mind. The list price of a home in the West End or off Rimrock Road does not change based on who buys it, but the annual carrying cost now does, and by a lot.
| Buyer profile on a $500,000 Billings home | Rate structure applied | Effective 2026 direction vs. 2024 |
|---|---|---|
| Primary residence, enrolled by the deadline | 0.76% first $400K, 1.10% on the balance | Materially lower |
| Long-term rental, enrolled | Same tiered structure | Materially lower |
| Second home, pied-à-terre, or short-term rental | Flat 1.90% | Materially higher |
That table is the single most useful thing an out-of-state buyer can carry into a Billings showing.
The window that already closed
Here is the friction that catches people off guard. The enrollment deadline for 2026 was March 20, 2026. If you buy a Billings home this July and the seller was enrolled, the reduced rate carries you through the rest of 2026, but you still have to enroll yourself for 2027. If the seller was not enrolled, whether because the home was a rental, a second residence, or simply overlooked, the 2026 bill you inherit is calculated at the non-homestead rate. There is no mid-year cure.
The state's own numbers show how often that gap gets missed by owners who assumed the paperwork was automatic. In Yellowstone County, mobile home bills went out months ahead of the standard cycle and gave everyone a preview. In Yellowstone County, 3,346 of roughly 5,800 mobile homes were assessed at the higher rate, according to Treasurer Hank Peters. More than half of the eligible mobile home owners in the county paid the non-homestead rate this year because they did not enroll.
That is the number a buyer should sit with. It is not a warning about mobile homes. It is a warning about a system that assumes owners will apply and then charges the higher rate when they do not. The same mechanism now applies to the single family stock that Heidi's clients trade in.
Practically, that means two questions belong on every buyer's due-diligence list before earnest money moves:
- Is the property currently enrolled for the homestead reduced rate, and can the seller verify it through homestead.mt.gov?
- If closing lands after March 20, what is the plan for the 2027 enrollment window that reopens shortly after?
Sellers have a mirror concern. A listing marketed as an investment or a lock-and-leave second home is now, on paper, a materially more expensive property to hold than the identical house sold to an owner-occupant. That difference will show up in what buyers are willing to pay.
The charter footnote only Billings has to read
There is a second wrinkle that is entirely local. Billings is one of two Montana cities with a voter-approved charter limiting the number of property tax mills the city can levy. The other is Sunburst on Montana's Hi-Line. That cap, written into the 1977 charter, forced a scramble in Helena when the legislature realized HB 231's rate cuts would gut the Billings general fund.
City Finance Director Andy Zoeller told KTVQ the bill as originally drafted would mean roughly a $6.5 million to $7 million reduction in revenue the city was legally unable to backfill on its own. The fix the legislature landed on was to override the charter. Lawmakers wrote the tax laws so that they mandated Billings levy the amount set by the Legislature, even though it violated the charter.
The city council then had to translate that into a mill resolution. The Montana Legislature passed House Bill 231, which requires the city to levy the number of mills in 2026 that will generate the same amount of property tax revenue as in 2025. Councilwoman Jennifer Owen proposed an amendment that specified the increase of 34.71 mills is due to HB 231, an unusual bit of bookkeeping designed to keep the state mandate legally distinct from the charter cap. The amendment passed 6 to 3.
The upshot for a homeowner is quiet but not trivial. The average Billings homeowner can expect a savings of about $205 for the city's portion of their tax bill in 2026. The upshot for the market is that the city itself is operating under a compromise that could still be challenged. City Administrator Chris Kukulski was blunt about what a lawsuit would mean, telling the Daily Montanan that "To answer that, we're going to need a bunch of lawyers." The state has agreed to cover the defense, but the underlying question of whether a city can be compelled to violate its own charter is unsettled.
None of this changes what your bill says this November. It does change how confidently anyone can forecast the local mill picture into 2027 and 2028, which is a data point worth holding if you are comparing Billings to a Bozeman or Kalispell purchase.
Where the market is quietly repricing this
Look at the surface data and Billings looks like a slow, ordinary market. The Redfin median sale price for March 2026 was around $380,000, down about 3% year over year, with median days on market above 100. Zillow's home value index for Billings sat near $398,000 in April 2026, up under 2%. The Movoto median list price for June 2026 was closer to $425,000.
Read those numbers with the tax structure in mind and a more useful pattern emerges. The $400,000 first-tier line now sits almost exactly at the median. A home priced at $395,000 and a home priced at $445,000 are not just $50,000 apart. The second one pushes a slice of its value into the 1.10% band for every year the buyer owns it. Across a seven year hold, that is real money, and it is beginning to show up in how buyers negotiate the last five percent of price on homes that straddle the line.
The same logic runs through the upper end of Heidi's book. The Billings Gazette's reporting on legislative modeling showed that for an owner of an $800,000 home in Billings, the annual tax relief would be about $550 versus $350, respectively. The owner of a property valued at $1.5 million would see an increase of around $10 a year under HB 231, compared to a savings of around $111 through HB 155. The upper-mid market is where the reform delivers its cleanest benefit. Genuinely luxury homes see something close to a wash.
For an out-of-state relocator, none of the local savings apply until enrollment is confirmed. For a family selling a Rimrock West home to trade up inside the city, the tax picture on the replacement house depends more on where it lands relative to the $400,000 and $1.5 million tier lines than on the headline mill rate.
Questions worth asking before you sign
Does the seller's enrollment status transfer? Only for the remainder of the calendar year. Buyers must enroll on their own to keep the reduced rate for the following tax year, through homestead.mt.gov during the enrollment window.
If I own a Billings home but live in it fewer than seven months a year, what am I? Not a homestead. The property is taxed at the flat 1.90% non-homestead rate. Long-term rental status is a separate application with its own criteria and periodic recertification.
Is the Billings city portion of my bill stable going forward? The state mandate holds it in place for now. The charter question is unresolved and worth watching if you plan a long hold. For personal tax scenarios, the Yellowstone County Treasurer's office and a licensed CPA are the right calls. This piece is market mechanics, not tax advice.
If you are weighing a move-up in Billings, a relocation from out of state, or a sale where the buyer pool includes both primary residents and investors, the property tax structure now affects your pricing math in ways it did not eighteen months ago. Heidi Brosovich and the Brosovich Real Estate Team can walk you through the enrollment status of any specific address, model the tier math on a target home, and coordinate the due diligence that keeps a closing clean. Request a Free Home Valuation to start with your own numbers.
