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Bill

LC 1727

Provide exclusion from income for certain income from sale of a newly constructed residence

2025 Regular Session

Montana bill would exclude capital gains from newly constructed home sales from state income tax, potentially reducing state revenue while benefiting homebuilders and property sellers.

(LC) Draft Delivered to Requester
#housing #revenue #state #taxation(generally) #taxation--corporations #taxation--individualincome
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Bill Summary · LC 1727

Legislative bill overview

LC 1727 would exclude from Montana state income tax a portion or all of the capital gains from the sale of a newly constructed residence. The bill appears designed to incentivize new home construction or make homeownership more accessible by reducing the tax burden on profits from selling newly built properties.

Why is this important

Housing affordability and construction are significant policy concerns in Montana. This tax exclusion could influence housing market behavior, affect state revenue, and potentially benefit builders, developers, and homeowners selling new construction. The fiscal impact on the state budget depends on how broadly the exclusion applies and what income thresholds are set.

Potential points of contention

  • Revenue impact: Excluding capital gains from taxation reduces state income, requiring either budget cuts elsewhere or examination of which taxpayers benefit most from this exclusion
  • Definition disputes: What qualifies as "newly constructed" (new to market vs. recently built), which types of properties qualify, and whether vacation homes or investment properties are included will determine the exclusion's scope and cost
  • Equity concerns: Critics may argue the benefit disproportionately favors wealthier individuals and developers rather than addressing affordability for first-time homebuyers or lower-income Montanans

Compiled from official sources — confirm details with the bill’s official record.

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