Property Classification and Appraisal Notices for tax years 2023-2024 were mailed in June.
The department held public meetings in cities and towns across the state to help taxpayers understand the property valuation process and how the department determined the new values on their classification and appraisal notices.
Frequently Asked Questions
- Appraisal Guidelines
- Assessment Notices
- Changes to and Calculations of Value
- Comparable Properties
- Contacting Department Field Offices or Local Government Offices
- Home Buyer Resources
- Legislative Guidelines and Requirements
- Mills and Millage Rates
- Mill Levy Calculation and Property Taxes
- New Construction
- Prior Year Reappraisal Information
- Property Location
- Property Type
- Request for Informal Classification and Appraisal Review
- Special Districts
How do you determine percent complete on 1/1/2022 without coming to the property and inspecting it inside and out?
An appraiser would have come and done an external inspection of the property.
Based on their observations of the property or through conversations with the property owner or builder, the appraiser will arrive at a best estimate of what the percent complete would be as of January 1st.
Our appraisers do not look through windows when performing an external inspection and only inspect the interior of a property when invited to do so by the property owner.
If you do not come into properties, how do you know the square footage and other characteristics such as the number of bedrooms, bathrooms, etc.?
We would visit the property and complete an external inspection of the property. Our square footage is based on an external measurement of the structures. Other property characteristics such as number of bedrooms and bathrooms are typically obtained through conversations with the property owner or builder when inspecting the property.
If the appraiser was unable to contact anyone, we will rely on general observations, building permits, listings, or any other source we can find to obtain this information.
Is property depreciation not considered during the appraisal process?
Depreciation is considered when the cost approach is used. Values using the cost approach are determined as replacement cost new less depreciation.
We use cost tables to estimate what the replacement cost of the structure would be and then apply depreciation to that replacement cost based upon its effective age, condition, and other factors.
What does 3501 – Improvements on residential city/town lots mean?
That is a class code for your property and how we make sure the correct tax rate is applied to the property based on its classification. This indicates that you have buildings located on a city or town lot.
I did not receive a notice as my mailing address is not updated. How can I update the mailing address and get a copy of the notices?
Please contact the local field office that services the county where your property is located. They will be able to update the mailing address for your property and provide you with a copy of your classification and appraisal notice.
Why doesn’t my notice show a prior year assessed value like the example in the presentation?
The prior year assessed value column will only display on notices where the prior appraisal cycle and prior year values are different.
This would occur if changes had been made to the property between the last reappraisal cycle and current reappraisal cycle, such as new construction.
Changes to and Calculations of Value
If my home/property has sold within the reappraisal cycle, will the assessed value from PAD be about the same as the price I bought it for?
Our general assessment date for this reappraisal cycle is 1/1/2022. So, all property is valued at 100% of market value as of 1/1/2022. Any sale that has occurred after that date would be included in our models for our next reappraisal cycle.
If the sale occurred prior to this date, it would have been included in modeling for this cycle.
If the sale occurred close to the 1/1/2022, we will take that into consideration when valuing the property.
It seems that homes that have recently sold have a higher valuation than homes that have not sold recently? Why is my property which I had purchased in recent years valued higher than my neighbors who have lived in their property for the past 20 years?
We are required by law to reappraise all property within the state every two years. A property recently selling versus not having sold for many years will not be assessed differently. We use recent sales to build market models that are then used to value all property.
If your value is different from your neighbor’s value, it is the result of differences in property characteristics between the two properties, which results in different comparable sales being used to value each respective property. The difference is not because one has sold more recently than the other.
Can you give a range of the change in value for residential property? I know there will be variation across the state.
The current median value and percent change in value by county for residential and commercial property for this reappraisal cycle can be found here. However, values within specific counties can very significantly.
For more specific information regarding your property or county you should contact your local field office.
Are we paying higher taxes on our property because of people from out of state are paying higher prices for homes, thereby driving up the value of our home that we have owned for 20 years?
State law requires that all property be valued at 100% of market value. We use properties that transferred on the open market between willing buyers and sellers to develop market models used to value residential property.
Values have increased substantially across much of the state over the prior couple of years, but taxes will not rise proportionately as local governments and taxing jurisdictions are limited in the amount of property taxes they can collect.
Why aren’t we charging those who have recently moved here and paid higher prices for homes a higher tax rate?
The various classes of property and their associated tax rates are all determined and set by the legislature.
Current law requires that all residential property be valued at 100% of market value and has the same tax rate of 1.35%.
Any changes to this would need to be passed by the legislature.
My property classification and appraisal notice was 50% higher than what we actually paid for our property in 2022. How is this possible?
If you purchased your property or had a fee appraisal done within six months of the January 1st, 2022 lien date, or you purchased your property, or you had a fee appraisal done between July 1st 2021 and June 30th, 2022, we can take these into consideration upon request.
Contact your local field office and speak with one of our appraisers regarding your property.
If market sales drop next year, will our property taxes be re-evaluated to show this change?
The state is on a two-year reappraisal cycle. All property will be reappraised again in 2025 with a January 1st, 2024 valuation date. We will be using sales data up through December 31st, 2023 for the next reappraisal.
If there were to be downturn in the market as evidenced by a decrease in sales prices, these would be included in our modeling process and reflected in the next reappraisal.
If the sales occurred after December 31st, 2023, they would be used for our reappraisal in 2027.
Is the age of the residence accounted for in the assessed value through the depreciation calculation?
Yes. When the cost approach to value is the method used to value a property, the age of the property is a factor that is used in determining the amount of depreciation that is applied.
For properties valued using the comparable sales approach, that age would be one of the factors used in selecting comparable properties and adjusting those comparable properties to the match the subject property.
What is the formula for calculating what the property taxes will be?
Market Value x Tax Rate = Taxable Value x Mill Levy = General Property Tax.
A mill represents 1/1000th of a dollar. When taking the mill levy against the taxable value of the property the decimal place for the mills needs to be moved three places to the left.
For example: if the total levy for the districts where your property is located was 500 mills and moving the decimal three place, you would use .5 when performing the calculation.
I thought sale prices in Montana were confidential. How does the Department of Revenue have access to this information?
Montana is a non-disclosure state, meaning that property sale prices are confidential and not public information. However, they are provided to DOR.
Whenever a property sale occurs, a realty transfer certificate must be completed and filed when the deed is recorded. This certificate contains the sale price of the property and is used by the department for reappraisal purposes to develop our valuation models.
For the sales comparison approach, is there a way to see the other properties that were used as a comparable?
Montana is a non-disclosure state, meaning sales price information is confidential and not publicly available.
However, if you visit our local field office and sign a confidentiality agreement, we will show you the comparable sales that were used to value your property.
Contacting Department Field Offices or Local Government Offices
Are there other ways of contacting the local treasury office as opposed to a phone call?
If you have questions regarding your classification or appraisal notice, you can call, email, or stop by your local field office in person.
Contact information for the field office serving your county, including phone number, address, and email address, can be found here.
If you are looking for your county treasurer, they generally accept walk in traffic as well and are typically located in your county’s courthouse or annex.
Where do we apply for property tax assistance?
The application for the property tax assistance program is available on our website at Property Tax Assistance Program.
You can also visit or call any of our field offices and our staff will mail you an application form.
The form should be completed and returned to the field office that services the county where your property is located.
Do the local townhalls vary in any way compared to the zoom version?
The in person townhall meetings will cover the same basic information and slides found in the zoom townhalls.
The main difference is that we have staff on hand at most of the local townhall meetings available to discuss specific questions someone might have about their property.
Home Buyer Resources
We close on a house soon and are trying to budget for the property taxes. Are there any resources available that might be helpful to new residents?
Our website, mtrevenue.gov, is full of good information regarding property classification and appraisal.
Until the local taxing jurisdictions have finalized their budgets and mill levy calculations this fall, it’s difficult to estimate what your property taxes might be.
Legislative Guidelines and Requirements
Why did the appraisal notices not include the provisions of 15-10-420, MCA, which limits the increase property taxes?
Montana law requires us to include the prior year mill levy on the appraisal notice. Current year mill levies won’t be set until the fall so, unfortunately, the current year mill levies are not able to be included on the notices to provide a more accurate estimate of what the general tax obligation might be.
The notices have limited space available to provide a detailed explanation of how 15-10-420, MCA places limitations on the amount property taxes can increase.
Does the law require you to estimate the taxes?
No, statute does not require the department to estimate the taxes. The law does require that the prior year mill levy be included so that the property owner can estimate what the tax impact of their new appraisal might be.
Based on feedback from many different stakeholders over the years, beginning in 2016, the department began performing the estimated tax calculation on the notices for property owners for their convenience, transparency, and to avoid confusion that was occurring with people trying to perform the calculations themselves.
How come the state portion of property taxes increased and the tax rates were not adjusted to mitigate reappraisal?
The tax rates are determined and set by the legislature.
The legislature chose not to make any adjustments to the residential and commercial tax rates for this cycle.
Unlike local mills, the state mills for school equalization and the university system are set in statute and don’t float down like the local mills will.
The revenue generated from the state mills does not stay at the state level but is redistributed back out to all the local school districts across the state.
What would the effect of the proposed ballot initiative to cap reappraisal have?
This initiative would result in a significant change from the current system and be largely dependent on the how the legislature would choose to change current laws to implement the initiative.
There are too many unknowns and not enough information available at this time to determine what the overall impact of this initiative would be.
Mills and Millage Rates
Do the university, school, and technical mills get revised as part of this valuation process?
No, unlike the local mills that should float downwards as values increase, the state school equalization, university, and vocational school mills are set in statute and do not change because of reappraisal.
So, this year’s millage rates may be less than last year's, and the actual tax amount could be less than the current estimate?
Yes, local taxing jurisdictions are only allowed to collect the same amount of property tax revenue as that assessed in the prior year, plus half the average rate of inflation from the prior three years and any new construction that has occurred.
This would exclude any recent voter approved levies as well as the state school equalization and university levies.
Mill Levy Calculation and Property Taxes
I get that appraisals are supposed to be close to market value. What I don’t understand is that our projected taxes will be 26-30% higher. Local governments don’t need a revenue windfall. How can a county or state justify this large increase in revenue?
The estimated tax that shows on your assessment notice is based upon the prior year’s mill levy which statute requires that we provide on the assessment notices. Generally speaking, local taxing jurisdictions are limited in the amount of property tax revenue they can collect each year. They can only collect the same amount of property tax actually assessed in the prior year plus half of the average rate of inflation for the previous three years plus any new construction that has occurred.
So, when a taxing jurisdiction sees a large increase in their total taxable value, they will float their mills down so that they collect the same revenue as the prior year, plus the inflationary increase and any new growth. The state mills, however, will not change, and this would exclude any voter approved mills that have been passed.
In most cases, if your county saw a large increase in value for this reappraisal cycle, the tax amount shown on your notice will be overestimated.
Is the statement that property taxes aren’t necessarily going to increase incorrect? I understand that the residential tax rate is 1.35% of assessed value, so if assessed value goes up then aren’t taxes going to go up?
If your property saw an increase in value, then chances are your property taxes will increase. However, it’s important to note that your tax typically will not increase proportionally to your increase in value. A 50% increase in your assessed value will not result in a 50% increase is your property taxes.
Local taxing jurisdictions are limited in the amount of property tax revenue they can collect each year. They can only collect the same amount of property tax actually assessed in the prior year, plus half of the average rate of inflation for the previous three years, plus any new construction that has occurred.
So, when a taxing jurisdiction sees a large increase in their total taxable value, they will float their mills down so that they collect the same revenue as the prior year plus the inflationary increase and any new growth. The state mills, however, will not change, and this would exclude any voter approved mills that have been passed.
Given the significant increases, will there by any way to calculate what the true tax amount will be prior to receiving the tax bill this fall?
Mill levies will be set by the local taxing jurisdictions in September. Once those have been set, you can contact your local field office and get a better idea of what your general property taxes will be.
The best estimate now is to account for the 101 statewide mills that won’t change. If you take your current year taxable value and subtract the prior cycle/year taxable value and multiply the difference by 10%. This will provide you with what the increase in the state portion of your property tax bill will be.
With all the new construction that has been occurring will the number of new houses contributing to the tax base impact an individual’s tax bill (like mill levies changing every year)?
New construction is excluded from the mill levy calculation in its first year as it is considered newly taxable property.
Local governments and taxing jurisdictions are allowed to increase the amount of property tax revenue they collect to include new construction as additional properties result in increased demand for services.
However, over the long run, a larger tax base means a larger pool of properties to spread the total tax burden over.
Our home was built after January 1st, 2022 and is still not complete. Why did we receive this assessment?
Our valuation date for this reappraisal cycle is January 1st, 2022. Our general assessment date is January 1st of each year, meaning property is valued based upon what was there on January 1st.
In the case of new construction, we would value the property based on what the percentage of completion was on January 1st.
Prior Year Reappraisal Information
Is information related to prior assessment cycles available on the website?
You can view three years’ worth of property information on the Montana Cadastral site which would include information from the prior reappraisal cycle.
Any information older than three years can be obtained by contacting your local field office.
Is waterfront property in a separate category from other property during assessment? My waterfront assessment nearly doubled while my residential property didn’t.
Property is placed into different neighborhoods with similar or like properties and models are developed so that properties with similar attributes and characteristics are grouped together and used as comparable sales when valuing a subject property.
It’s very likely that waterfront property is in a separate neighborhood with sales indicating waterfront property appreciated faster than a typical residential property did. To learn more about the specifics of your property, please contact your local field office and speak with one of our appraisers.
How do we determine if we are in a location with a technical or vocational school?
The five counties with technical or vocational schools and subject to the additional 1.5 state mills for support of these schools are Silver Bow, Cascade, Yellowstone, Missoula, and Lewis & Clark.
Why are there such large variations between counties? Neighboring counties might have seen drastically different changes in value.
Different areas and counties experienced different levels of market appreciation since the last reappraisal cycle. Our values are based upon actual sales that were occurring within those counties and our models are developed so that properties with similar physical and locational characteristics are grouped together and used as comparable sales to value a similarly situated property.
Additionally, looking at just the percentage of change can be a little misleading. As an example, a $50,000 increase in the median value in two counties can result in vastly different percent change amounts if one county had relatively low values to begin with compared to a county with a higher starting property values from the past cycle.
Does the countywide average increase apply to all types of property or only to residential?
The median countywide increases in value can be found on our website here.
There is an option for residential property and separate one for commercial property; these options only apply to those types of property.
Other classes of property, such as agricultural or forestland, would be increasing or decreasing at different rates than that of residential and commercial property.
What is the minimum land size necessary to be considered agricultural status?
Anything 160 acres or greater in size is automatically classified as agricultural land.
Anything less than 160 acres would need to apply for agricultural classification, demonstrating that the land is used for a bona fide agricultural purpose and capable of achieving a certain productive capacity. There is no minimum size requirement.
More information regarding agricultural classification and the eligibility requirements can be found on our website, mtrevenue.gov.
Can you tell me a little more on how agricultural land is valued?
Unlike residential and commercial property that is valued at 100% of it’s market value, agricultural property is valued based upon its productive capacity.
Productivity value is determined by utilizing NRCS soil survey data and using a 10-year Olympic average of various commodity prices.
Agricultural land is taxed at 2.16% of its productivity value.
Would income on a business property be considered in property taxes?
No, any income generated by the business itself would not be included when determining the value of the property but would be subject to income taxes.
When valuing commercial property using the income approach, we’re only looking at the income that the property itself can generate, rents, and expenses.
Any income generated from the business operating out of the property is not considered.
My property record card lists SFR under residential dwellings. What does that stand for?
SFR indicates that it is a single-family residence.
Request for Informal Classification and Appraisal Review (Form AB-26)
If we have multiple properties, do we need to file a separate AB-26 form for every property or can we file one form for multiple properties in the same county?
Typically, if you have multiple residential or commercial properties that you would like to appeal, we will request an individual AB-26 form for each property, outlining the specific reasons why you disagree with its classification or value for that particular property.
If you have multiple adjacent vacant land parcels such as agricultural land, one AB-26 would be fine.
If we’ve made changes to our property since January 1st, those would not be reflected in an appeal, correct?
Our general assessment date is January 1st of each year.
Property is assessed based upon what was there as of January 1st.
If you’ve made changes to your property since January 1st, those would not be considered for the 2023 tax year but would be reflected on the assessment for 2024.
If the estimated tax amount shown on the notice isn’t accurate, will homeowners receive notice of the actual tax amount?
Yes, property owners will receive a tax bill from their county treasurer typically by the end of October.
This bill will contain the actual tax amount due after local governments and taxing jurisdictions have gone through their budgeting process and set their mills for the year.
How many special districts does my city or county have?
Unfortunately, the DOR does not maintain information on special fees or assessments.
If you would like more info on what special fees or assessments your property is subject to in addition to your general property tax, you would need to review your most recent property tax bill or contact your county treasurer.