Montana Man, 68, Begs for Moratorium on Property Taxes After Bill Reaches $8K Just ‘To Live in Our Own Home’

Montana Man, 68, Begs for Moratorium on Property Taxes After Bill Reaches $8K Just ‘To Live in Our Own Home’

A Montana veteran gave a viral speech about the woeful state of property taxes in the Treasure State.

“I’m on Social Security, I’m 68 years old and I just work to pay my taxes,” says Kurt, in a video shared on Facebook. TikTok by Ryan Busse, who is running for Montana’s next governor.

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Kurt claims that over the past two years, his annual property taxes have risen from $895 to almost $8,000 – an increase of about 790% – which he says is like paying almost “$700 in rent a month to the state to live in our own house.” .” The state has a Homeowner/Elderly Renter Tax Credit and the maximum credit is $1,150.

“There needs to be a moratorium on what we have to pay,” he says, adding that he had to continue working on what was supposed to be his golden years of retirement to cover your rising ownership costs. “I’m stubborn enough [that] I don’t want to dig into my bank account to pay them.”

Kurt is one of thousands from Montana owners suffering sticker shock about recent property tax increases. He says: “We just can’t take this anymore. This was a great place and still is, but the people who made it great can no longer afford to live here.”

Here’s what’s happening in the Treasury State.

Rising property values

There are several reasons why property taxes may increase over time. First, property tax is typically based on a percentage of a home’s assessed value – so if its value increases, your tax bill is likely to increase as well.

In Kurt’s case, he claims to have purchased his property in 1995. In the 29 years since then, the value of the family home (he doesn’t say where the property is located in Montana) has undoubtedly increased.

According to economic data from FRED house price index For Billings, MT (the state’s most populous city), the median home price at the end of 1995 was about $103,860 and by the end of 2023 it had soared about 272% to more than $387,000.

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Looking at data going back to 1985, the sharpest jump in value in Billings and other parts of the state occurred between 2021 and 2023 – during and after the COVID-19 pandemic, when there was an increase in migration to the state and demand for housing quickly outbid. . This corresponds with Kurt’s complaint that his property taxes have skyrocketed “in the last two years,” which is likely because his property value increased.

The story continues

Instead of working deeply on what should be yours retirement yearsKurt could sell the family home, collect his capital gains, and move somewhere smaller (and with a more manageable tax bill) — but the house has too much sentimental value for him to consider that.

“My children were raised [there]. They want to get married there and I intend to stay there until the end,” he says – even if that means doing winter and summer shifts.

Other homeowners in Montana who are not as attached to their properties may see selling and moving as their only viable option. According to a Montana Free Press (MTFP) analysis of revenue department data for the 956,000 properties on the state’s property tax rolls in 2022 and 2023, the average homeowner in Montana saw a 21% increase in their property taxes this year, with increases typical values ​​ranging between 11% and 35%. This translates into residential tax bills that will be $98 to $660 more per year.

Where do the taxes go?

Property taxes account for nearly 97% of local tax revenue here, considerably more than the share of 71% of local governments in all U.S. states combined, according to a state legislature. presentation. Property taxes represent 9.9% of Montana state government tax revenue, as opposed to 1.7% for all state governments.

Montana’s heavy reliance on property taxes is possibly due to comparatively lower tax revenue from sales and excise taxes. Montana does not charge state or local sales taxes.

Property taxes are calculated by multiplying the property’s market value by its tax rate (1.35% for residential properties) and factory rates (a factory generates $1 for every $1,000 in taxable value). For example, for a property worth $400,000 with a tax rate of 1.35% and a tax rate of 650, the property tax would be $3,510.

Nearly all property taxes in Montana go toward county and city government services, such as elementary and secondary schools, law enforcement, and firefighters. This money typically does not go to state services, such as universities and prisons, which are funded by state income taxes.

As inflation rose nationally, this not only increased the cost of living, but also inflated the costs of providing public services. As a result, some local governments have had to compensate by increasing property tax rates.

There’s no easy solution to Montanans’ property tax nightmares. The State Revenue Department promised property tax discounts for fiscal years 2022 and 2023 up to $675 for eligible homeowners, using $350 million of the state’s budget surplus.

While this could help some cash-strapped Montana homeowners, the “moratorium” on taxes that Chuck so desperately wants remains highly unlikely.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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