HB154 creates a new refundable Montana income tax credit called the “housing fairness property tax credit” for homeowners and renters. The credit is based on a portion of property taxes billed or, for renters, a deemed “rent-equivalent property tax paid” equal to 15% of gross rent. Eligibility is limited to Montana residents who lived in the state for at least nine months of the tax year, occupied a qualified residence or rental for at least six to seven months, and had household income under $150,000.
The credit amount is calculated by subtracting an income-based threshold amount from 75% of the property tax billed or rent-equivalent amount, with a refund available if the credit exceeds the taxpayer’s income tax liability. The bill also sets filing deadlines, documentation requirements, anti-fraud penalties, and rules for shared rentals, public subsidies, and excessive rent in non-arm’s-length arrangements. It is effective January 1, 2026, and applies to credits claimed for tax years beginning on or after that date for property taxes billed after December 31, 2025.
Impact
HB154 would add a new credit to Montana’s income tax code and amend several property tax and tax-assistance statutes to coordinate the new credit with existing programs. It would bar taxpayers from claiming both the new housing fairness credit and the existing residential property tax credit for the elderly, and it would make taxpayers ineligible for certain overlapping property tax assistance benefits in some cases. The bill also requires state and county tax notices to inform taxpayers about the new credit, and it adds the credit to the list of tax credits subject to periodic legislative review.
Sentiment
The bill appears to have had meaningful support in the House, passing committee and floor votes with clear majorities, but it did not advance in the Senate and ultimately died in standing committee. The voting pattern suggests the proposal was viewed favorably by many House members as a property-tax relief measure for both homeowners and renters, while the Senate did not move it forward. No committee transcript is available, so the record reflects support in the House and a lack of final Senate approval rather than detailed debate.
Contention
The main policy tension is between expanding relief to a broader group of taxpayers and preserving or avoiding overlap with existing property tax relief programs. The bill expressly prevents double-dipping with the elderly property tax credit and limits claims where taxes or rent are subsidized, which likely reflects concern about targeting benefits and fiscal cost. Another likely point of contention is the credit’s structure for renters, since it uses a fixed percentage of rent as a proxy for property taxes paid, and the income cap and threshold formula may have been debated as to whether they are too broad or too narrow.
An act to amend Section 50205 of the Health and Safety Code, and to amend Sections 12206, 17058, and 23610.5 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
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