The Truth about Property Tax Relief
- John Fitzpatrick
- May 11
- 3 min read
PROPERTY TAX AND PROPERTY TAX RELIEF:
A DRUMMOND EXAMPLE
(BASED ON THE ACTUAL VALUE OF A RESIDENCE ON EDWARDS STREET)
BACKGROUND
Over 99 percent of the property tax collected in Montana is spent by local governments as follows:
Public Schools 56%
Counties 30%
Cities/Towns 11%
Special Districts 4%
TOTAL 100%
There are three parties involved in the residential property tax process.
1. The Department of Revenue: It establishes the market value of the residential
property using comparable sales (i.e. the market value approach) or, via appraisal (i.e. the cost approach).
2. The Legislature: It establishes the assessment rate(s). The assessment rate converts the market value into a taxable value to which the tax rate or, mill levy is applied to create the amount of tax due.
3. Local Government: They establish the tax rate expressed as a mill levy. Again, the taxable value of the property is multiplied by the mill levy to determine the amount of tax due.
Below is an example calculation.
Market value of property $300,000
Multiply by Assessment Rate X .0135
Taxable Value $ 4,050
Mill levy X 500 mills
Tax due $ 2,025
PROPERTY TAX RELIEF
The 2025 legislature revised the assessment rate for residential property. It created a tiered system which taxes the first $400,000 of value at .76 percent a 44% percent reduction from the old rate of 1.35 percent. The next $1.1 million of value is assessed at 1.1 percent, and the value above $1.5 million at 2.2 percent.
The subject residence for this analysis had a market value of $233,100 in 2024 which was increased by the Department of Revenue 28.6 percent to $286,800 in 2025 based on market value comparisons.
With the new tax relief bill in place the taxable value of the residence declined from $3,012 in 2024 to $2,180 in 2025, a 28 percent reduction.
The tax in 2024 was based on a total mill levy of 548.35 mills yielding a property tax due of $1,652. In 2025, both Granite County and the Town of Drummond increased their mills levies and the total millage for 2025 increased to 587.91 mills generating a tax due of $1,282. Notwithstanding the increase in the residence’s market value and the increase in local mill levies, the total tax due dropped by $370.
HB 231 and SB 542 worked as planned and, in Granite County, about 2,100 homeowners received property tax relief.
THE SCHREIBER PROPERTY TAX PLAN
In the fall of 2024, Schreiber publicly called for a property tax system based “on a uniform assessment rate and doing away with artificial distinctions between properties”.
When you do the math for her plan, to simply hold the amount of property tax collections level, the assessment rate goes to 1.45 percent or, about double what the owner of a modest, under $400,000 home is now assessed. At the same time property owned by the railroads and utilities drops from an assessment rate of 12 percent to 1.45 percent as well, giving them an 88 percent reduction in their property tax bill.
In the case of the Drummond residence considered earlier, lets see what the Schreiber plan means.
Market value $268,800
Schreiber assessment rate X .0145
Taxable Value $ 4,015
2024 Mill levy X 548.35 mills
Tax due $ 2,202
If you use the lower mill levy from 2024, the property tax on the residence increases from $1,282 to $2,202 a $920 increase.
With Fitzpatrick, the homeowner received a $370 tax reduction. Under the Schreiber plan, that decrease is wiped out and the homeowner gets a $920 increase.
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