Understanding Montana Real Estate Tax Liens

Sales Type: Tax Liens
Frequency: Varies
Interest Rate: 10%
Penalty: None 2%
Redemption Period: 2-3yr Redemption
Bid Method: Radom Selection, Rotational Bidding

Montana, with its picturesque landscapes and vast expanses, is not only a haven for nature enthusiasts but also an interesting terrain for investors seeking opportunities in tax lien certificates. In this article, we will delve into the dynamics of Montana’s tax lien system, exploring the processes, regulations, and potential returns that investors need to be aware of.

Montana’s Tax Lien Certificate System:

Montana operates as a Tax Lien Certificate state, meaning that when investors purchase a tax lien certificate through a Montana sale, they acquire a lien on the property rather than ownership. The primary focus is on obtaining past-due property taxes, making it a unique avenue for investors looking to capitalize on such opportunities.

According to Nolo, a reputable legal information website, property tax liens in Montana take precedence over other mortgages or liens on the property, making them a secure investment. In the event of non-payment of taxes, the government can sell the property to cover the outstanding taxes, following state-prescribed procedures.

Redeeming Tax-Defaulted Properties:

To retain ownership, property owners must redeem the property by reimbursing the investor for the past-due taxes, plus a 10 percent return on the investment. The redemption amount includes the original amount paid, assignment fees, mailing costs, and an annual 10% interest.

Montana’s tax-defaulted property auctions come with a 3-year grace period, allowing property owners time to redeem their homes. The state legislature emphasizes the importance of understanding the specific rules for each county, as they may differ. Failure to redeem the tax lien certificate could result in the investor foreclosing on the property.

County-Specific Rules and Selection Processes:

Each county in Montana may have distinct rules governing tax lien sales. For example, some counties employ a lottery or random chance method to resolve conflicts when multiple individuals express interest in the same lien. Others may operate on a “first-come, first-served” basis.

The 36-month redemption period is crucial for both investors and property owners. Investors need to navigate through different county regulations, including whether subsequent taxes can be paid by investors.

Due Diligence Before Investing:

Investors looking to buy tax liens in Montana must conduct thorough research before committing to a purchase. Unlike traditional property transactions, there are no guarantees about the condition or value of the property from the county selling the tax lien.


Before diving into Montana’s tax lien certificate market, investors must familiarize themselves with the state’s regulations, county-specific rules, and redemption processes. Doing the necessary due diligence and understanding the nuances of each county will empower investors to make strategic decisions. In the vast landscape of Montana’s tax lien opportunities, knowledge is the key to unlocking the potential for profitable investments.