After a multi-week extension, Montana’s state revenue department will stop accepting applications from landlords seeking to shield themselves from the state’s impending second-home tax at midnight Friday.  As of Thursday, a spokesperson for the state Department of Revenue said the agency ha d so far received roughly 33,900 applications for exemptions of long-term rental properties, most of which are still pending. That’s up from applications for just over 19,100 properties in late February. The latest batch of property applications accounts for more than 65,800 living units, according to analysts from the revenue department. But those applications appear to cover less than half — about 45% — of the state’s overall rental stock, according to recent estimates from the U.S. Census Bureau. A spokesperson for the revenue department did not dispute that figure, but noted that not all rental units identified by census data may be eligible for the long-term rental exemption, based on definitions passed by the Legislature. The spokesperson, Jason Slead, added that the department was glad to see that the number of rental units covered by current applications had increased by about 20% since the state’s earlier deadline.  Last month, the Department of Revenue under the administration of Gov. Greg Gianforte announced it would push back the March 1 deadline for landlords to file exemptions to midnight on March 20. In announcing the extension, the governor’s office and the top brass at the revenue department cited glitches with the state application portal “caused by a high volume of last-minute filings.” In the days leading up to the first deadline, Montana Free Press reported that landlords for as many as three-quarters of the state’s rentals had not yet applied for the second-home property tax exemption, according to revenue department application data and 2024 census data estimates. Without an approved exemption, properties that are not considered a primary residence or a long-term rental unit stand to be hit by a significant property tax increase — a downstream effect of a property tax rate shift passed by lawmakers during the 2025 Legislature.   The legislation, backed by Gianforte and supported by a bipartisan coalition of lawmakers, increased default tax rates on residential properties while reducing rates for properties that qualify either as owner-occupied principal residences, also called a “homestead,” or long-term rentals. The new laws provided landlords and other eligible property owners with the opportunity to file an exemption application. Most owner-occupied homes were automatically exempt. But in February, the president of the Montana Landlords Association said many members had expressed confusion and uncertainty about how to properly fill out the required forms. MTFP heard from other landlords who said they had not known about the looming second-home tax or exemption opportunity at all. Rep. Jonathan Karlen, D-Missoula, one of the members of the minority party who voted in favor of the property tax package, said in a March interview with MTFP that he had heard from many landlords working to get their applications in on time.  “I think the extended date definitely has helped,” Karlen said. “There were a fair amount of emails that I was sending or was cc’d on [in February] where landlords were feeling the pressure of that March 1 deadline.” Landlords who do not receive an exemption could see their business properties taxed as second homes. The state revenue department last year estimated that the changed rate could increase property taxes for an average home that isn’t exempt from the second-home tax by 50% between 2025 and 2026. That increased cost could be passed on to tenants through rent increases. Karlen said he is concerned that landlords who had not heard about the impact of the second-home tax might raise rents to cover the gap. “I’m really hoping we’re not in a situation where there are a lot of landlords that haven’t completed it,” he said, referring to the application paperwork. In February, a spokesperson for the revenue department said it had “worked diligently to get the word out across Montana” to ensure that property owners knew how to apply for lower rates through the state’s website. The post Montana nears deadline for landlords to avoid second-home tax appeared first on Montana Free Press. ...read more read less