In Montana, a peculiar tax code classification results in vastly different property tax bills for two adjacent homes, one classified as residential, the other as agricultural.
The agricultural property, valued at $1.2 million, enjoys significant tax benefits due to its classification, resulting in a 2023 tax bill of about $2,100, $2,100 lower than its residential neighbor.
Montana's tax system aims to promote farming and ranching, allowing properties designated as agricultural to benefit from lower effective tax rates, fostering the agricultural character of the state.
The effective tax rate for the residential property was $331 an acre, while the agricultural property, despite its luxury amenities, only paid $2 an acre due to tax incentives.
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