Montana Department of Revenue 2023 Property Valuation

July 13, 2023

There has been a lot of buzz about residential and commercial tax rates lately. Due to recent property tax valuations many citizens have questions and concerns. The Montana Department of Revenue has resources to help taxpayers understand the process of valuation for tax purposes, about property tax calculations and tax expenditures.

Property Tax Basics

The department's Property Assessment Division assesses property values throughout the state, but it is the department, legislature, local government, and schools, together, that determine the property tax amount.

The assessed market value, the tax rate, possible exemptions, mill rate, and possible local government special assessments are the components that make up the total property tax paid by an individual property owner.

The department annually provides taxing jurisdictions with the total taxable value of property located in each taxing jurisdiction within a county by the first Monday in August.

Local governments then establish their budgets and set their mill levies for property tax

calculations and collections based on the certified taxable values provided to each taxing jurisdiction.

Where do our tax dollars go?

Property tax dollars fund local government, public schools, law enforcement, fire protection, road and bridge construction and maintenance, transportation, weed control, and public assistance.

Fiscal Year 2023

32.37% Local Schools

28.15% County

17.79% State

11.26% Cities and Towns

5.96% County-Wide Schools

4.4% Fire & Miscellaneous

My property value jumped! Will my property taxes go up the same percentage?

Not necessarily. Montana law provides for limitations on the amount of property tax that can be collected. 15-10-420, MCA

Property Tax Calculations

Current Assessed Value x Tax Rate = Current Taxable Value

Current Taxable Value x Millage Rate/1,000 = General Taxes

The state, local governments, and school districts levy a different number of mills. The state's mills are statutorily fixed, while local governments and school districts set their mills based on the budgets of the individual taxing jurisdictions and their specific tax base.

Note: State law allows cities, counties, school districts, and special districts to ask voters to collect property taxes higher than those authorized in state law and to levy property taxes to pay for bonds. These levy elections or bond issue questions appear on school, city, or county election ballots.

The treasurer's office in each county is responsible for generating tax bills and collecting taxes for services received by property owners in their counties.

All property in Montana (except forest land) was valued as of January 1, 2022, for the 2023-2024 valuation cycle. 15-7-111, MCA

The department uses three approaches to value property:

Sales Comparison Approach is used to value vacant land and residential properties. The department estimates the value of a property by analyzing the sale prices of similar properties. Comparable residential sales are adjusted for differences, such as square feet of living area, condition, age, construction quality grade, and basement, using statistical analysis.

Cost Approach is used to value parcels with non-typical circumstances and when the sales data available is insufficient or not comparable to the subject property. The approach is based on calculating a property's replacement cost new of buildings and other improvements, deducting depreciation, and adding the land value.

Income Approach is used to value commercial properties using income and expense data provided by commercial property owners. The department estimates market value by capitalizing a property's net income into a present worth (market value) of the future income stream of the property.

The department determines a productivity value for agricultural and forest land based on the productive capacity of the land and the appropriate commodity price.

Questions? Contact your local office or call Customer Service.

(406) 444-6900

MTRevenue.gov