The long-term rental rate is not 1.1%
This is the correction that matters most in dollars, and it runs the owner's way. If you decided a rental claim was not worth the paperwork, you probably decided it on the wrong number.
The short version
A long-term rental claim buys the same graduated bands as the homestead — starting at 0.76% — not a flat 1.1%. The flat rate applies to a long-term rental multifamily unit and nothing else.
On a rental house below the median residential value ($386,000), the claim restores the old 0.76% rate exactly — it reverses the entire 2026 increase rather than softening it.
Where the 1.1% story comes from
MCA 15-6-134 sets the class four residential rates. Subsection (3)(b) has two limbs, and reading only the second is what produces the wrong answer:
… residential property that qualifies for the homestead reduced tax rate provided for in 15-6-405 or the rental property reduced tax rate provided for in 15-6-411…
— and then the four graduated bands. The rental rate is named in the same breath as the homestead rate and takes the same treatment. Limb (ii), the flat 1.1%, is written for a long-term rental multifamily unit. A single-family rental house, a duplex side, a trailer or a mobile home does not go there.
What the difference is worth
Take a rental house at $300,000 — comfortably below the $386,000 median, which is where a large share of Montana rental stock sits:
| Reading | Rate applied | Taxable value |
|---|---|---|
| No claim on file (the default) | 1.9% | $5,700 |
| The widely quoted flat rate | 1.1% | $3,300 |
| What the statute actually gives | 0.76% | $2,280 |
The gap between the quoted rate and the real one is $1,020 of taxable value on this house — the quoted figure understates the benefit by about 31%. If you decided the claim was not worth the paperwork on the strength of the flat number, that decision was made on the wrong figure.
The four tests
MCA 15-6-402 defines a long-term rental, and the department restates it as four conditions:
1. It is residential property with a dwelling on it
A single-family dwelling, a unit of a multiple-unit dwelling, a trailer, a manufactured home or a mobile home. Bare land can never qualify — there is nothing to rent as a residence.
2. Rented in periods of 28 days or more
Not “is it rented” but “did any single tenancy run under 28 days.” This is the test that disqualifies short-term rentals, and it does so even when the calendar is full all year. Why that catches so many cabins.
3. Rented at least 7 months of the year you are claiming
Measured in the claimed year, not a prior one. A vacancy of up to 5 months for documented repairs is expressly allowed, so a rehab year does not automatically break the claim if you keep the paperwork.
4. You are current on the property taxes
Same condition as the homestead rate.
Two limits inside the definition that cost real money
The claim covers the dwelling’s parcel only. MCA 15-6-402 says the parcel the improvements sit on “but not including any contiguous or adjacent parcels.” If the house and the acreage behind it are separate geocodes, the bare parcel stays at the default rate and cannot ride along. Check for split parcels before counting a saving.
There is no retroactive fix for a missed rental year. MCA 15-6-407 provides a one-year recovery for an unfiled homestead claim. It has no rental equivalent. A rental year you did not claim is simply gone.
The advantage the homestead rate does not have
Entity ownership is fine here. The requirement to own in an individual name or a grantor revocable trust is a homestead condition, not a rental one — the department states plainly that property owned by an LLC, a corporation or an irrevocable trust does qualify for the long-term rental reduced rate.
That is the single most useful asymmetry between the two programs. For a house or cabin held in an entity, where the homestead rate is permanently out of reach, the rental claim is not a consolation prize — it reaches the same bands, from the same 0.76% floor.
Applying
Same window as the homestead claim: the 2027 tax year closes March 1, 2027, the department opened it early, a late application rolls to the following year, and the saving lands on the fall 2027 bill. MCA 15-6-411 also asks for income and expense information for the immediately preceding year, including the rent charged each month, along with a declaration under penalty of perjury.
If the property has never been rented, ask before you plan around it
There is a genuine tension in the statute. Eligibility under MCA 15-6-402 is measured in the year being claimed. The application under MCA 15-6-411 asks for the preceding year’s rent and expenses. A property that has never been rented has no preceding-year figures to give.
The two readings are a full tax year apart in effect, and we have not seen the department resolve it in writing. If you are converting a second home to a rental, options include calling the department field office and settling it before you commit to a lease term — the answer decides whether the first saving lands in 2027 or a year later.
One more thing to plan for
Approval rolls over with ownership and use, but the rental rate carries an audit rotation the homestead rate does not: beginning in 2028 the department must require 20% of long-term rentals to reapply each year. Expect to be re-papered roughly one year in five, and keep leases and rent rolls where you can find them.
Related
- The 28-day test that disqualifies short-term rentals
Montana's long-term rental reduced rate requires tenancies of 28 days or more, for at least 7 months of the claimed year. A property booked solid every week of the year fails. The question is not whether it is rented — it is whether any tenancy ran under 28 days.
- The homestead reduced rate: who qualifies, and how to claim it
The Montana homestead reduced tax rate takes a principal residence off the 1.9% default and onto graduated bands starting at 0.76%. The four tests, the ownership rule that disqualifies LLCs outright, the real application window, and what happens if you miss it.
- Second homes and cabins: the four options
There is no relief program for a Montana second home as such — HB 231 left cabins and short-term rentals at the 1.9% default deliberately. The four options, costed: pay it, convert to a long-term rental, move in, or sell. Plus the seasonal lease most owners miss.
Where your own parcel stands
The rate check is free and takes about ten seconds — look up any Montana property and see which rate applies, which reduced rate it could qualify for, and the gap between them. No email required. If you would rather someone went through the whole notice, that is what we do.
Rates, deadlines and statutory citations verified against MCA Title 15 as of September 17, 2026. The median residential value ($386,000) and median commercial value ($379,000) are recalculated every two years with reappraisal — the next reset is in 2027. Up The Creek Research LLC is a public-records research firm, not a law firm, an accounting firm or an appraisal firm; this page explains what the statute provides and is not advice about your particular situation. See our Disclaimer & Terms.