This is my first time posting and I was wondering if anyone in Montana has considered the impacts of the 1.9% flat property tax on second homes that do not qualify as 1) a primary residence (NOT allowed by FS by-laws) or as a 2) 7-month+ annual rental (also NOT allowed by FS by-laws).

Curious if anyone knows of an exception in the MT tax code that we can take advantage of since we are not able to avoid this increase thru occupancy changes. Basically, our hands are tied by the regulations of the FS Recreational Residence Program.

And yes, I recognize that the tax is only on the value of the real property or standing structure(s), but regardless, this is a significant increase. My taxes would essentially double with this "flat 1.9% of market value" rate.

Anyone else have ideas here? Any smart tax attorneys out there with some advice? :)

Cheer and Happy Trails~

Zoe Smith

We are aware several states are looking at taxing non-primary residences at higher property tax rates, however, Montana is the first state I'm aware of that put the concept into law. Certainly, our cabins on Forest Service lands do not qualify as primary residences and therefor appear to meet the criteria for the higher 1.9% MT property tax rate. For what it's worth, most states impose a property tax on recreation residence cabins. While tax rates vary from state to state, the national average tends to be in the ~1% range of assessed value. One area where our cabins are not equivalent to other non-primary homes is the fact our cabins by definition are personal property and not real property (we don't own the land). Some states have different property valuation methods for personal property and/or have different tax rates. In some states personal property taxes are lower because of the different valuation (assessment) methods or tax rates. From briefly reviewing the new MT property taxes, it appears the new law applies to mobile homes (also personal property) the same as real property. You might take a closer look at the specific statute to see if recreation residences are subject to the same regulation as mobile homes, or if there is a personal property loophole to explore. 

Doug Gann
NFH Treasurer