What does a typical Bozeman house owe in property tax? Under Montana's 2026 rules, the house can't answer that. The owner can. The state now taxes a home based on how its owner uses it. That means the tax line on a listing sheet describes the seller's life, and it can change at closing. Anyone writing an offer this fall is buying into the first tax season where that change shows up on paper.
The bill arriving this fall was set by the last owner
Montana real property tax bills usually go out in late October. The first half is due November 30, or 30 days after the postmark if that falls later. The second half is due May 31, and DOR moves that deadline to the next business day when it lands on a weekend or holiday. Gallatin County hadn't posted its own mailing date as of early October, so the statewide pattern is the best guide for now.
If you close on a Bozeman home in October or November, that first bill reflects the seller's status. The Montana Department of Revenue's homestead guidance spells out what follows:
"If the home was already enrolled for a reduced tax rate (homestead or long-term rental) before your purchase, that reduced rate will remain in place for 2026, and your tax bill will reflect the reduced rate. You will need to enroll your property for the homestead reduced rate for it to continue beyond the end of the year."
The reduced rate lasts through December 31 of the year the home changes hands, and then it ends. A buyer who wants it for 2027 has to enroll in their own name during the current enrollment window, which closes March 1, 2027. A sale is one of the specific events that requires a new enrollment, even when the seller qualified automatically through the 2025 rebate.
How much the owner's use changes the number
For tax year 2026, an enrolled primary residence or a qualifying long-term rental other than a multifamily building is taxed in tiers. The rate is 0.76% on the first $378,000 of market value, 0.90% on the portion up to $756,000, 1.10% on the portion up to $1,511,999, and 1.90% above that. Second homes, short-term rentals, and vacant residential lots pay a flat 1.90% on the full value.
At its August 18 budget meeting, Bozeman finance staff used $652,100 as a typical home value, close to the median. Applying the state's published rates to that figure and two higher values gives the following:
| Market value | Taxable value as enrolled primary home | Taxable value as second home or STR | Ratio |
|---|---|---|---|
| $652,100 | about $5,340 | about $12,390 | about 2.3x |
| $900,000 | about $7,860 | $17,100 | about 2.2x |
| $1,200,000 | about $11,160 | $22,800 | about 2.0x |
These are taxable values. The dollar bill comes from multiplying taxable value by the combined local mill levy, and we couldn't confirm the total levy for a Bozeman address. Still, the ratio holds whatever the levy turns out to be. The same house is taxed on roughly twice the taxable value when its owner doesn't live there, and the gap is widest at the price points where most Bozeman homes trade.
The city's own numbers show the shift. On August 18, the City Commission voted unanimously to levy its full mill authority. According to a meeting summary, staff still projected that the city portion of a typical primary residence's bill would drop about $101 from fiscal 2026. They credited the drop to state changes that moved tax burden away from primary residences. When primary homes pay less while the city collects its full levy, more of the burden falls on other kinds of property.
Four buyers, four different first years
Since the rate follows the owner, the seller's history only predicts your bill if your use matches theirs.
- Primary-residence buyer, enrolled home. Your November 2026 bill carries the seller's reduced rate. Your 2027 rate depends on enrolling by March 1, 2027.
- Primary-residence buyer, home not enrolled. This could be a former second home, a former short-term rental, or a home whose owner never enrolled. DOR taxes it at the 1.90% rate for 2026. For buyers who closed after the deadline but before May 31 and lived in the home at least seven months of 2026, DOR describes a refund claim of the difference, filed between January 1 and May 31, 2027. A fall buyer can't meet seven months of 2026 occupancy, so confirm your 2026 situation directly with DOR before counting on a refund.
- Second-home buyer, enrolled home. This is where the listing understates costs the most. The 2026 bill shows the seller's tiered rate, and starting in 2027 the home moves to the flat 1.90%. Using the table above, a $900,000 home's taxable value would rise from about $7,860 to $17,100.
- Long-term rental buyer. A qualifying long-term rental is leased for periods of at least 28 days, for at least seven months of the year, to a tenant who lives there. Multifamily dwellings used as long-term rentals pay a flat 1.10%. A long-term rental owner has to notify DOR within 30 days of a sale or any change that ends eligibility, and DOR reclassifies the property at the start of the next calendar year. If you're buying a rental near campus, the seller's classification tells you what the home qualified for in their hands. Keeping it is your job.
In Bozeman, short-term rental rights start over at closing too
Investors run into a second reset that's specific to the city. Bozeman has banned new Type 3 short-term rentals, meaning whole homes that aren't owner-occupied, since December 14, 2023, under Ordinance 2149. Type 3 rentals that already had a valid permit could keep operating as "Legacy Type 3." The city's language on what ends that status is direct: a legacy permit that "expires, is revoked, or is forfeited by transfer of ownership of the property" ends the property's eligibility.
So a Bozeman home with a whole-home rental booking history can't hand those rights to its next owner. STR hosting permits also don't transfer when a property changes hands. A new owner applies from scratch and pays the annual $325 registration fee. The new owner also needs a state sales and use tax permit, a Gallatin County public accommodations license, and a fire inspection.
The STR types still open to new hosts all require the owner to live there. Type 1 rents rooms while the host is home. Type 2A rents the host's primary residence while the host is away. Type 2B rents an ADU on the host's lot or one other unit in the same building as the host's home. Type 1 and 2A hosts sign a form every year confirming they live in the home at least 70% of the calendar year. That's a different standard from the state's seven-month occupancy test for the homestead rate. A buyer planning to host has to satisfy the city and the state separately.
The city's own materials disagree right now
The Unified Development Code took effect February 1, 2026, and merged the RS, R-1, and R-2 districts into a single RA district. The city's STR page still says only Type 1 rentals are allowed in RA. On July 14, 2026, though, the City Commission adopted Ordinance 2026-06, which amends the allowed-use table "to allow as an accessory use short term rental Type 2 in the RA zoning district." As of the online code library's September update, that ordinance is adopted but not yet codified, and the city's STR zoning PDF still shows Type 2 as not allowed in RA. Any purchase that depends on hosting in an RA neighborhood should start with a written answer from City Planning about the specific parcel and STR subtype.
Before you write the offer
- Look up the home's current enrollment with DOR's Homestead Enrollment Verification Tool, using the property's geocode.
- Recalculate the tax using your own use. The seller's figure only applies if you'll use the home the way they did.
- If you'll live there, put March 1, 2027 on your calendar and enroll with DOR once you've closed.
- If you're buying a rental, plan for the 30-day notice the seller owes DOR and your own long-term rental enrollment.
- If the home's income has come from short-term stays, assume any legacy Type 3 rights end at closing, and confirm with the city what a new owner could be permitted to run.
Common questions
Could these rates change before my 2027 bill? As of a June 11, 2026 report, a lawsuit challenging SB 542, one of the 2025 residential tax bills, was pending in Gallatin County District Court. The proposed property tax ballot initiatives had stalled, and backers pointed to the 2027 Legislature. We haven't confirmed the case's status since then. DOR is currently running 2027 enrollment under the existing structure.
Does a city STR permit affect my state tax classification? The city says its permit process doesn't cover taxes. Treat the city permit and the state classification as two separate questions, and ask DOR how your specific use will be classified.
Who can answer questions about my situation? DOR's call center is at 406-444-6900, and local DOR field offices can help with documentation and eligibility. This post is general information, not tax advice.
If you're weighing a Bozeman home and want the carrying costs worked out for how you'll actually use it, whether as a primary home, a rental, or a second home, Courtney King can go through the enrollment status, the city's rental rules, and the timing with you before you sign. Schedule a consultation.
