HOMEOWNERS in a key state will save hundreds soon, thanks to a recently passed law.
The move comes amid efforts to battle rising house prices and, subsequently, staggering property tax hikes.
1
Without impeding state revenue, Montana has now cut property taxes for standard homeowners, per Realtor.com.
Lawmakers passed the two bills that made the cuts a reality on April 30, which moved taxes away from those residents with a single primary residence and placed the burden instead on second-home owners, larger utility companies, refineries, and others.
They’re known as House Bill 231 and Senate Bill 542, each a preference for Governor Greg Gianforte (R).
HB 231 was the main part of the tax cut plan that placed the burden on second-home owners, and immediately caught backlash from some local officials and vacation rental operators.
They argued that the bill would unjustly penalize residents who owned rental properties and that it would create funding gaps for certain cities.
While initially dead after the pushback, HB 231 was then combined with SB 542 to help spread the tax burden onto industrial properties.
Even so, SB 542 caught its share of uproar from companies who claimed it would cause job losses and higher utility costs for Montanans.
After some fierce debate, the bills were ultimately pushed through and made into law to ensure that residential property taxes were finally checked.
This was emphasized by Representative Llew Jones, who noted the bills as necessary for the results sought by the state and its residents.
The bills’ homestead exemption won’t take effect until 2026, and Jones noted that primary homeowners would start to see savings then.
Considering the median cost for a home in Montana, about $459,370, according to Zillow, it would be about $719.
Texas is also exploring similar property tax relief laws, per Newsweek.
PAY NO MORE?
Some states, like Florida, Illinois, Kansas, and Pennsylvania, are also exploring options to eliminate property taxes for good.
Florida Governor Ron DeSantis suggested a “constitutional amendment” to get rid of the property tax in a post on X earlier this year.
States Considering Property Tax Elimination
- Florida
- Illinois
- Kansas
- Pennsylvania
“I agree that taxing land/property is the more oppressive and ineffective form of taxation,” DeSantis wrote.
“Property taxes are local, not state. So we’d need to do a constitutional amendment (requires 60 percent of voters to approve) to eliminate them (which I would support) or even to reform/lower them.”
“We should put the boldest amendment on the ballot that has a chance of getting that 60 percent,” he added.
For this type of bill in Florida to pass, it would require the Office of Economic and Demographic Research to develop a plan that considered state budget cuts and increased sales taxes.
EXPERT’S THOUGHTS
As several states explore options, David Schleicher, a professor of property and urban law at Yale Law School, told Newsweek that it’s all “largely a response to the run-up in house prices, particularly in the suburbs and exurbs, that followed the pandemic.”
Housing demand boomed after the height of the pandemic because of remote work, Americans willing to commute farther, or those starting a new household with different occupants.
“Basically, people didn’t want roommates and wanted more space,” Schleicher emphasized.
“This drove housing prices up and office prices down.”
Some states are also offering residents tax relief in other areas.
A rebate in Georgia is going out worth $500 to residents who meet at least three criteria.
Another tax credit worth up to $1,000 is also being sent out in New York.