Bill would give landlords tax break for renting below market

Supporters of a bill that would exempt Montana landlords from paying full property taxes if they rent their property below market value told the House Taxation Committee Monday that the bill could offer a much needed solution to the housing crisis, and provide affordable housing for renters.

Rep. Julie Dooling, R-Helena, is the sponsor of House Bill 848. She said the bill was designed to combat rising property taxes that she says end up putting both landlords and renters in a bind.

“There was a time when I was living paycheck to paycheck to paycheck trying to provide for myself and my son. And they're people that have it way worse out there. And I just think this would be a great bill, especially for those landlords who are wanting to provide housing for folks so that they don't have to live in their car or don't have to go back home and live with their parents or -- or what have you,” Dooling said.

The bill would basically use property tax breaks to incentive landlords to offer cheaper rent. Property taxes would be cut by half for an apartment that’s offered at least 25% below market value. The owner of a trailer court could get an exemption of 75% of the value of their land if they rent lots for below $500 a month. Leases would need to be extended for at least a year in order to qualify for the tax cuts.

Fair market value would be recalculated every year and the program would be optional for any landlord who chooses to participate.

The hearing drew two proponents. One proponent owns and rents trailers across the state and he said he wants to be able to rent them to his tenants at a price they can afford, but the market is so tight he can’t without help. John Sinrud represented the Montana Landlords Association and said that stories like that aren’t uncommon.

“They don't wanna raise rents and they want good tenants in there, but the property taxes keep going up and somebody's gonna have to foot the bill,” Sinrud said.

There were no opponents at the bill’s hearing Monday. According to the Department of Commerce the average cost of rent was $886 across the state in 2021. According to the same statistics, 36% of Montanans pay at least 35% of their income on rent.

Elinor Smith is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association, the Montana Newspaper Association and the Greater Montana Foundation.