If you serve in the military or have served, it helps to know exactly how Montana handles property taxes for veterans, because the state's main break is income-tested rather than a flat exemption. Montana is home to Malmstrom Air Force Base in Great Falls, where the 341st Missile Wing operates intercontinental ballistic missiles, alongside a large Montana National Guard presence, so it draws military families after a PCS, which is short for Permanent Change of Station, the official military move from one duty station to another. Montana does not erase a disabled veteran's tax bill outright. Instead, it lowers the tax rate on the home on a sliding scale tied to income. This guide explains how that works in plain language and points you to the state's own sources. Tax law changes, so treat these figures as a starting point and confirm the current rules before you file.
How Montana Helps Disabled Veterans With Property Taxes
Montana's main property tax break for veterans is the Montana Disabled Veterans Assistance Program, usually shortened to MDV. The U.S. Department of Veterans Affairs, known as the VA, is the federal agency that rates service-connected disabilities, and a top rating is the gateway to this program. As the Montana Department of Revenue explains, the MDV program helps a disabled veteran, or an unmarried surviving spouse, by reducing the property tax rate on the home rather than removing a fixed slice of its value. Depending on income and marital status, the reduction is 100 percent, 80 percent, 70 percent, or 50 percent of the normal tax rate.
Who Qualifies
To qualify for the 2026 tax year, you must own or be under contract to buy the home, live in it as your primary residence for at least seven months of the year, and have a VA letter showing a current 100 percent service-connected disability rating. The program is income-tested, so your federal adjusted gross income, with capital and income losses added back, must fall under a yearly limit. For the 2026 tax year those limits are about $62,598 for a single filer, $72,229 for a married filer or head of household, and $54,573 for an unmarried surviving spouse. The income ranges are adjusted each year for inflation, so check the current figures before you apply.
How the Sliding Scale Works
The size of your break depends on where your income falls. A veteran with the lowest qualifying income receives a 100 percent reduction of the normal tax rate on the home, and the reduction steps down to 80, 70, and 50 percent as income rises toward the limit. For homes on agricultural or forest land, the benefit applies to the home and a one-acre homesite. Because the program adjusts your tax rate rather than your home's value, a higher-value home in the same income tier still receives the same percentage break.
Surviving Spouses
The benefit can carry to an unmarried surviving spouse. A surviving spouse may qualify if the veteran died on active duty, died from a service-connected disability, or was rated 100 percent disabled at the time of death, and the spouse meets the program's income limit. Confirm the current conditions with the Montana Department of Revenue before you rely on it.
How It Works With Your Local Tax Bill
Property tax in Montana is administered by the Department of Revenue and collected by your county treasurer, and you apply for MDV through the Department of Revenue or your local field office. You must apply by April 15, and if you miss the deadline your application is considered for the following year. Once you are approved, the program stays active as long as you own and live in the home, and the state sends a letter each year confirming your status, though you must continue to meet the income and occupancy requirements. Near Malmstrom Air Force Base, the field office serves the Great Falls area.
If you are weighing where to settle, our guide to the military bases in Montana can help you picture the local cost of owning a home.
Military Pay and Montana State Income Tax
Montana has a graduated state income tax. For 2025 the top rate is 5.9 percent, and beginning in 2026 the top rate drops to 5.65 percent, according to the Montana Department of Revenue. How the state treats military pay depends on the type of pay.
As the Montana Department of Revenue's military guidance explains, a resident service member may subtract basic, special, and incentive pay from active duty in the regular armed forces, so that active-duty pay is effectively untaxed by the state. National Guard or reserve pay tied to a contingency operation or homeland defense activity, and combat zone pay, are also exempt. Military retirement pay is generally taxed like other income, though a newer Working Military Retirement Exemption lets some working retirees exclude part of their retirement pay. A nonresident service member stationed in Montana on orders does not owe Montana tax on military pay unless there is other Montana income. VA disability compensation is not part of your federal income, so Montana does not tax it. Because rates and rules can change, confirm the current details with the Department of Revenue before you file.
A Note for Military Spouses: MSRRA
If you are a military spouse, the Military Spouse Residency Relief Act, known as MSRRA, may matter to you. MSRRA is a federal law that lets a military spouse keep a home state for tax and voting purposes even after moving on military orders. You do not automatically become a Montana resident just because your service member got orders here.
Under the related federal rules, a service member, the spouse, or both may choose the service member's home state, the spouse's home state, or the service member's permanent duty station for residency. Because that choice affects both states' taxes, confirm yours before you file. For the property tax program in this guide, what usually matters most is that the qualifying veteran owns and lives in the home as the primary residence.
