Quick Reference: Bozeman vs Missoula at a Glance

The Same Property, Two Opposite Answers

An investor holds two identical propositions: a three-bedroom house, not owner-occupied, intended as a full-time vacation rental. One sits in Bozeman. One sits in Missoula, about 200 miles west.

In Missoula, that is a "tourist home." It is a recognised, registrable use. The owner notifies the neighbours, registers with the city, obtains a public accommodations licence, and operates.

In Bozeman, that is a Type 3 short-term rental, prohibited since 14 December 2023. No permit will be issued. The only Type 3 units still running are legacy permits that were active before that date, and those die with the property's next sale.

Same asset, same use, same state. One city treats it as a permitted business. The other treats it as the thing it specifically outlawed.

That divergence is the story of managing short-term rentals in Montana, and it is why guidance written for one city is actively dangerous in the other. Managers used to a single statewide framework, as in Ohio's eviction process or Georgia's dispossessory proceedings, need to invert the instinct here. In Montana, the state sets the taxes and the tenancy law. The city decides whether your business model is legal at all.

Before Anything Else: Both Codes Were Replaced in 2026

This is the most important fact for anyone researching these markets right now, and almost no third-party guide reflects it.

Bozeman updated its entire Unified Development Code effective 1 February 2026. The RS, R1 and R2 districts were consolidated into a new RA district. The city states that only Type 1 STRs are allowed in RA, and that Type 2 STRs operating in RA may no longer be permitted under the new code.

Missoula adopted Title 22, its Unified Development Code, by Ordinance 3778 on 2 February 2026, in full effect 4 March 2026. Ordinance 3778 repealed Title 20, the old zoning ordinance, in its entirety, along with Titles 16, 17 and 21. Zoning was consolidated into 22 districts, and conditional use permits and minimum parking requirements were eliminated. A transition period allowed applications to be reviewed under either code until 2 July 2026; after that date the UDC governs.

Two consequences follow. Every guide listing Bozeman STR permissions by RS, R1 and R2 district is describing districts that no longer exist. And every guide citing Missoula tourist homes to MMC 20.40.135 is citing a section inside a repealed title.

Be aware that Missoula's own short-term rental registration page still cross-references "tourist homes regulated under Title 20, MMC." That reference has not caught up with Ordinance 3778. The registration and licensing requirements in Title 5 remain fully operative; it is the zoning treatment that now lives in Title 22. Verify any zoning question against Title 22 and the current zoning map rather than against the cross-reference.

If you are checking a Montana STR question against a blog post, a broker summary, or an AI answer written before spring 2026, assume the zoning citation is wrong until you verify it.

Bozeman: A Permit Tied to a Person, Not a Property

Bozeman's framework sorts every STR into a type, and the type determines everything else.

Type 1 is the rental of one or more bedrooms in the host's primary residence while the host occupies the same dwelling unit for the entire rental period. Type 2A is the rental of an entire dwelling unit that is the host's primary residence, with the host absent. Type 2B is an accessory dwelling unit on the same lot as the host's primary residence, or no more than one additional dwelling unit in the same building as the host's primary residence, whether or not the host is present. Type 3, the rental of an entire home that is not owner-occupied, is prohibited for new applications.

The gatekeeper for Types 1 and 2A is the 70% rule: the host must occupy the dwelling as a primary residence for at least 70% of the calendar year, and must sign a primary residence acknowledgement form every year. A property the host does not occupy 70% of the year is ineligible for the types that require primary residence.

Occupancy is capped by type. A Type 1 host may rent up to two bedrooms, except that in a two-bedroom dwelling only one bedroom may be rented, and no other area of the dwelling may be rented. Type 2 and legacy Type 3 units are capped at two persons per bedroom plus two additional persons, and the city may reduce that number based on available parking.

The registration fee is $325 annually. Fire inspections run on a three-year cycle, but a new inspection is triggered by a change of host, by adding or removing bedrooms, or by a permitted residential alteration affecting the STR use area. A public accommodations licence is issued by the state health department after inspection by the Gallatin City-County Health Department, and that inspection is not conducted until after the fire inspection has cleared.

The Bozeman Trap Nobody Underwrites For

Here is the provision that quietly destroys value in Bozeman acquisitions, stated plainly in the city's own FAQs.

STR permits are not transferable. They are approved for the current host of the property. If the property is sold or otherwise transferred, the approval terminates and a new application is required. And if a legacy Type 3 permit expires, is revoked, or is forfeited through transfer of ownership, the property is no longer eligible to operate as a legacy Type 3 at all.

The city is explicit that this is deliberate. Its stated intention was to use this approach to gradually remove short-term rentals existing in areas the current regulations would not authorise.

Read that as a valuation instruction. A Bozeman listing advertising "established Airbnb with active permit, strong revenue history" is advertising an income stream that terminates at closing. The buyer inherits a house, not a business. Unless the buyer will personally occupy the unit 70% of the year and qualify as a Type 1 or 2A host, the STR revenue in the pro forma is zero from day one.

The same logic applies to a lapse. A legacy Type 3 permit that misses a renewal date cannot be reinstated. That makes a renewal calendar a genuine asset-protection control rather than an administrative chore, and it is exactly the kind of date that belongs in contracts and renewals alongside lease expiries rather than in someone's inbox.

Bozeman's Enforcement Layer Is Real

Ordinance 2131, effective 11 August 2023, imposed affirmative obligations on hosting platforms. Every platform must list the active STR hosting permit number on all publicly available listings, and must provide the city's Community Development Department with a quarterly report naming the owner or responsible person and giving the address of every STR for which a booking transaction was conducted.

The city runs its permit portal and complaint intake through a dedicated monitoring vendor, so listings, permits and complaints sit in one system.

Failing to register is a misdemeanour under the municipal code, subject to fines, imprisonment and civil penalties. This is not a jurisdiction where an unpermitted listing quietly persists.

Missoula: Registration, Not Prohibition

Missoula regulates the same activity with an almost opposite philosophy.

The city defines a short-term rental as any dwelling unit rented for a period of occupancy less than 28 consecutive days where the renter or guest has a principal residence other than the short-term rental. Within that, a tourist home is a dwelling unit used most of the time as a short-term rental, where nobody lives in the unit long term as a primary residence. That is, definitionally, the category Bozeman banned. Missoula permits it, subject to process.

The core requirements are registration with the city and an annual rental business licence renewed by 31 January; a Short-Term Rental Registration number issued on submission, which the host can give to platforms immediately; a Safety Self-Inspection Checklist; a public accommodations licence through the Missoula City-County Health Department; and, for tourist homes in residential districts, a Neighbor Notification list submitted during the application process. The notification radius was eased years ago from all properties within 150 feet to properties one parcel deep.

On fees, use the adopted schedule rather than the webpage. Missoula's Business License and Registration Fee Schedule effective 1 January to 31 December 2026 sets $660 for a new short-term rental registration and $245 for renewal, plus a 5% technology fee calculated on total fees paid. The city's short-term rental page still displays the 2025 figure of $636, so a manager budgeting from that page will be short. Fee schedules are adopted annually, so confirm the current one before budgeting.

For context on the trajectory, those figures were $60 and $31 before the city's mid-decade enforcement push. Older guides still quote the old numbers.

Two features invert Bozeman.

• Not everything needs to register. The city's definition states that short term rental does not include rental of less than a full dwelling unit, such as the rental of a room or rooms in an owner-occupied home. In Bozeman that same arrangement is a Type 1 STR requiring a permit, a fire inspection, a health licence and a $325 annual fee. Before relying on the exclusion for anything other than the clear owner-occupied room case, confirm the property's ownership and occupancy structure with the city.

• There is no primary residence test. Missoula's framework asks where the unit is and who was told about it. Bozeman's asks who lives there and for how much of the year.

  On enforcement, from 5 December 2024 hosting platforms have been required to verify a valid City of Missoula registration number before accepting bookings, and the city notifies platforms when a registration is not approved.

Why the Two Cities Diverged

The gap is not ideological accident. It reflects different exposure.

A 2022 data report from Granicus, the monitoring platform Missoula uses, put Bozeman at 35.3 short-term rental listings per 1,000 households against 11.8 per 1,000 in Missoula. Bozeman is a Yellowstone gateway market with a small housing base and enormous visitor demand. Missoula is a university and regional-services city where STR penetration has been roughly a third as intense.

For a manager, that is a forecasting tool. Missoula's rules today resemble Bozeman's rules before 2023, and Columbia Falls was in 2026 actively examining a framework modelled on Bozeman's. The direction of travel in Montana's growth cities has been consistently toward primary-residence requirements. A portfolio built on Missoula's current permissiveness should be stress-tested against a future in which it tightens.

The State Layer: Lodging Taxes

Montana has no general sales tax, but it imposes two stacked lodging taxes on stays of fewer than 30 days: a 4% Lodging Facility Use Tax under MCA 15-65-101 and following, and a 4% Lodging Sales Tax under MCA 15-68-101 and following, for a combined 8%, administered by the Montana Department of Revenue.

Three details cost operators money when missed.

• The taxable base is wider than the room rate. The Department's guide states that sales price includes any separate charge or fee a purchaser must pay to facilitate the sale of accommodations, giving examples including cleaning fees, extra person charges, early check-in or late check-out fees, resort fees and convenience fees. Cleaning fees are taxable.

• Platform collection does not end the obligation. Senate Bill 52 made short-term rental marketplaces and online hosting platforms sellers of accommodations required to register, collect, report and pay these taxes on sales they facilitate. Hosts remain liable for tax on sales occurring outside a marketplace, which means direct bookings, repeat guests booking off-platform, and corporate arrangements. A portfolio taking both platform and direct bookings has a split liability that needs to be visible in the ledger, which argues for holding lodging tax as its own tracked line in income and expense management rather than netting it inside revenue.

• Neither city adds a resort tax. Montana's resort tax applies to resort communities and areas as defined at MCA 7-6-1501, requiring a population under 5,500 and more than half of economic activity from tourism. Big Sky, West Yellowstone, Whitefish and Red Lodge sit in that category. Bozeman and Missoula do not, so the effective lodging rate in both cities is 8% with no local layer. If a spreadsheet applies a resort tax to a Bozeman unit, it is wrong.

The 2026 Property Tax Structure Is the Real Repricing

Montana's 2025 legislature restructured residential property taxation through House Bill 231 and Senate Bill 542, and the full structure took effect in 2026. This is where the tax code and the zoning code collide.

Under the Department of Revenue's 2026 property tax information, enrolled primary residences and qualifying long-term rentals in single-unit property types, including single-family homes, townhomes, condominiums and manufactured homes, receive a tiered rate based on a statewide median home value estimated at $378,000: 0.76% below the median, 0.90% from the median to twice the median, 1.10% from two to four times the median, and 1.90% at four times the median or above. Multifamily dwellings used as long-term rentals are treated separately, at a flat 1.10%.

A flat 1.90% applies to second homes, short-term rentals, and vacant residential lots.

The reduced rates are not automatic classifications. They must be enrolled.

• Homestead Reduced Rate: the owner must own and live in the property as a principal residence for at least seven months. Eligible ownership is an individual, a couple, or a grantor revocable trust. Owners who received the 2025 property tax rebate and have not changed ownership or use were largely enrolled automatically.

• Long-Term Rental Reduced Rate: the property must be rented to tenants who occupy it as a residence, for periods of 28 days or more, for at least seven months of the year, with property taxes current. Time spent merely listing the property does not count. Entities can qualify, so LLC ownership is not a bar here, unlike the homestead rate.

Four operational points matter more than the rates themselves.

• The application will be denied without the financials. Montana law requires a completed long-term rental application to include the amount of rent charged each month for the preceding year plus prior-year income and expenses. The Department states that applications without this information are denied, and that zeros should be entered rather than fields left blank. That turns an annual tax filing into a records exercise your accounting system either supports or does not.

• Enrolment windows are hard. For the 2026 tax year, applications opened 1 December 2025 and the deadline was extended from 1 March to 20 March 2026 after portal problems, closing at midnight. The portal reopened on 4 May 2026 for tax year 2027 applications. Properties already enrolled for 2026 do not need to re-enrol for 2027. Miss the window and the property sits at the standard rate for the whole year, with no retroactive correction.

• Reduced rates do not automatically follow the property to a new owner. Where an enrolled property changes ownership during the year, the Homestead Reduced Rate remains in effect through the end of that calendar year, and the new owner must enrol in their own right to receive it for the following year. Long-Term Rental Reduced Rate eligibility is exposed to the same risk, since the Department has indicated the classification can be lost when ownership is sold or transferred, or when the property's use changes. Treat both the way you treat a Bozeman STR permit in an acquisition: verify the property's current enrolment status and confirm your own eligibility, rather than assuming the seller's classification carries forward.

• Do not equate the state test with the Bozeman test. The homestead rate needs seven months of principal residence, roughly 58% of the year. Bozeman's STR eligibility needs 70% of the calendar year, roughly 8.4 months. A host can satisfy the state homestead test and still fail Bozeman's STR occupancy requirement.

  The consequences of failing the seven-month test differ by property type. For a qualifying single-family long-term rental, failing it can move the property out of the reduced tiered classification and into the 1.90% non-principal-residence rate. Multifamily long-term rental property is treated under its own flat 1.10% category and should not be assumed to follow the same tiered structure.

  Rates, median values and enrolment windows are set annually. The Department publishes a rate comparison by year and property type alongside the 2026 page; check both before relying on any figure here.

   

Three Different Thresholds, Three Different Purposes

The article has now introduced 28 and 30-day lines several times, and they are not interchangeable. Keep them separate:

• Missoula's STR definition: less than 28 consecutive days, where the guest's principal residence is elsewhere.

• Bozeman's platform rule: a stay of 28 or more days must be reclassified by the platform so it cannot be reserved as a short-term rental.

• Montana lodging tax: applies to stays of fewer than 30 days.

• Long-Term Rental Reduced Rate: rentals of 28 days or more, for at least seven months of the year, with the tenant occupying as a residence.

Crossing one of these lines does not by itself answer whether a residential tenancy exists. The nature of the occupancy and the agreement still matters.

Where a Short Stay Becomes a Tenancy

Montana's Residential Landlord and Tenant Act, Title 70 Chapter 24, governs residential rental agreements for a dwelling unit while expressly excluding transient occupancy in a hotel or motel. Once an arrangement is a residential tenancy, a very different rulebook applies.

Under MCA 70-24-422, nonpayment of rent requires three days' written notice of the nonpayment and the landlord's intention to terminate; a noncompliance not otherwise specified carries a 14-day notice period; and substantially the same noncompliance recurring within six months permits termination on at least five days' notice. MCA 70-24-441 requires 30 days' written notice to end a month-to-month tenancy and seven days for week-to-week. Security deposits are governed by Title 70 Chapter 25, with return within 30 days where deductions are made and 10 days where none are.

Montana has no statewide just-cause requirement, and local rent control is preempted. Senate Bill 105, signed 1 May 2023, prohibits local governments from exercising any power to control the amount of rent charged for private residential or commercial property, subject to a carve-out where the local government has a property interest or an interest through a housing authority. Montana's powers-denied provisions for local governments separately restrict powers applying to or affecting landlords. This is one of the few areas where Bozeman and Missoula operate under identical rules.

The practical exposure is the monthly booking. A 32-night stay taken to fill a shoulder-season gap is not obviously a lodging transaction, and treating a guest who has become a tenant as a guest is how managers end up with an occupant they cannot remove on short notice. Booking length is a legal and tax classification, not a calendar preference, which is why booking rules belong in leasing management with hard stops rather than in a channel manager's discretion.

Common Mistakes Property Managers Make in These Markets

1. Using a Montana STR guide written before spring 2026. Bozeman's RS, R1 and R2 districts no longer exist, and Missoula's Title 20 has been repealed.

2. Buying a Bozeman property for its permit. Permits are not transferable, and legacy Type 3 status is destroyed by transfer of ownership.

3. Assuming a seller's reduced-rate enrolment carries forward. A change of ownership requires the new owner to enrol in their own right, and long-term rental classification can also be lost on sale, transfer, or a change of use.

4. Letting a Bozeman legacy permit lapse. It cannot be reinstated. The renewal date is the asset.

5. Assuming Missoula's rules resemble Bozeman's. Missoula permits precisely the non-owner-occupied whole-home use Bozeman banned.

6. Budgeting Missoula fees from the STR webpage. It still shows the 2025 $636 figure; the adopted 2026 schedule is $660 new and $245 renewal, plus a 5% technology fee.

7. Ignoring the 70% acknowledgement form. In Bozeman it must be signed every year, not once at application.

8. Confusing the seven-month homestead test with Bozeman's 70% rule. They are different thresholds, and 70% is stricter.

9. Filing a Long-Term Rental application without prior-year rent and income and expense detail. The Department denies incomplete applications.

10. Missing an enrolment window. There is no retroactive correction; the property sits at the standard rate for the year.

11. Excluding cleaning fees from the lodging tax base. The Department's guide includes them.

12. Assuming the platform handles all lodging tax. Direct and off-platform bookings remain the host's liability.

13. Applying a resort tax to Bozeman or Missoula. Neither qualifies under MCA 7-6-1501.

14. Sliding into a tenancy. A long stay can create a residential tenancy governed by MCA Title 70 Chapter 24, with 3-day, 14-day and 30-day notice mechanics rather than a checkout time.

15. Missing a triggered fire inspection in Bozeman. A change of host, a bedroom change, or a permitted remodel of the STR area can require a new inspection ahead of the three-year cycle.

Build the Compliance Record Before the Renewal

Almost every obligation in both cities is a date, a document, or a classification, and almost every enforcement action turns on whether the record exists.

Five things belong in the system rather than in memory. Permit and registration expiry dates need to sit at unit level with enough lead time to renew before lapse, because in Bozeman a lapse is permanent. Each unit needs its STR type or tourist home status, its zoning district under the current 2026 map, and the date that assignment was last verified. Booking length needs a hard maximum enforced at the point of booking. Tenancy length per unit per month needs to be reportable, because the Long-Term Rental Reduced Rate turns on 28-day stays across at least seven months and the Department requires supporting prior-year rent and income and expense detail. And lodging tax needs to be split between platform-collected and host-collected.

Conclusion

Montana asks a city-level question before anything else: is this use permitted here at all?

In Bozeman, the answer for a non-owner-occupied whole-home rental is no, and has been since December 2023. What remains is a host-centred system built on a 70% primary residence test, an annual acknowledgement, a $325 fee, a three-year fire inspection cycle, and a permit that dies with the sale of the property. In Missoula, the same use is a registrable tourist home requiring a business licence, a safety self-inspection, a public accommodations licence and neighbour notification in residential districts, with no primary residence test at all.

Above both sits a state layer that is genuinely uniform: 8% in stacked lodging taxes on stays under 30 days, platform collection under SB 52 that does not reach direct bookings, no resort tax in either city, preemption of local rent control under SB 105, and a landlord-tenant act that takes over once a stay becomes a tenancy. And a 2026 property tax structure that places short-term rentals at a flat 1.90%, while qualifying single-family long-term rentals may receive the reduced tiered rates and qualifying multifamily long-term rentals are treated under a separate flat category, with all reduced rates dependent on timely enrolment.

Beneath all of it sit two brand-new development codes. Before relying on any zoning answer for a Bozeman or Missoula short-term rental, check the date on the source. If it predates February 2026, it is describing districts and code sections that no longer exist.

This blog is for informational purposes only and does not constitute legal, tax or investment advice. Bozeman and Missoula both replaced their development codes in 2026 and adopt fee schedules annually, and Montana restructured residential property taxation for 2026 with rates, median values and enrolment windows that change each year. Verify zoning district, permit eligibility and current fees directly with the City of Bozeman or the City of Missoula, confirm tax treatment and enrolment deadlines with the Montana Department of Revenue, and consult a licensed Montana attorney or tax professional on a specific matter.

Frequently Asked Questions

Q1. Can I run a non-owner-occupied Airbnb in Bozeman?
No, not as a new operation. Ordinance 2149 prohibited new Type 3 short-term rentals from 14 December 2023. Only units holding an active city permit, or with a complete application submitted, before that date may continue as Legacy Type 3, and only while the permit is renewed on time and the property does not change hands.

Q2. Does a Bozeman STR permit transfer when I sell?
No. Permits are approved for the current host, and sale or transfer terminates the approval. For a Legacy Type 3, transfer permanently ends eligibility. Treat advertised STR income on a Bozeman sale as terminating at closing unless the buyer qualifies in their own right.

Q3. What is the 70% rule in Bozeman?
For Types 1 and 2A, the host must occupy the dwelling as a primary residence for at least 70% of the calendar year, certified on a form signed every year. Type 2B requires the host's primary residence to be on the same lot or in the same building.

Q4. What changed in Bozeman on 1 February 2026?
The city replaced its entire Unified Development Code. RS, R1 and R2 became a new RA district, only Type 1 STRs are allowed in RA, and Type 2 STRs operating in RA may no longer be permitted. Any zoning table listing STR rights by RS, R1 or R2 is out of date.

Q5. How does Missoula define a short-term rental?
As a dwelling unit rented for a period of occupancy less than 28 consecutive days where the guest has a principal residence other than the rental. A tourist home is a dwelling unit used most of the time as a short-term rental with no long-term primary resident.

Q6. What does a Missoula STR registration cost?
The adopted fee schedule effective 1 January to 31 December 2026 sets $660 for a new registration and $245 for renewal, plus a 5% technology fee on total fees paid. The city's STR webpage still displays the 2025 figure of $636.

Q7. Do I need to register a spare room in Missoula?
The city's definition states that short term rental does not include rental of less than a full dwelling unit, such as the rental of a room or rooms in an owner-occupied home. The same arrangement in Bozeman is a Type 1 STR and does require a permit. Confirm your specific structure with the city before relying on the exclusion.

Q8. What changed in Missoula in 2026?
Ordinance 3778 established Title 22, the Unified Development Code, adopted 2 February 2026 and in full effect 4 March 2026, repealing Title 20 in its entirety. The transition period ended 2 July 2026. Registration and licensing sit in Title 5; zoning now sits in Title 22.

Q9. How are short-term rentals taxed in Montana in 2026?
Short-term rentals, second homes and vacant residential lots are taxed at a flat 1.90% of assessed value. Enrolled primary residences and qualifying long-term rentals in single-unit property types use a tiered structure of 0.76%, 0.90%, 1.10% and 1.90% against an estimated statewide median of $378,000, while multifamily long-term rentals are treated separately at a flat 1.10%.

Q10. How does a rental qualify for the Long-Term Rental Reduced Rate?
It must be rented to tenants who occupy it as a residence for periods of 28 days or more for at least seven months of the year, with property taxes current, and it must be enrolled with the Department of Revenue. The application must include the monthly rent charged for the preceding year plus prior-year income and expenses, or it will be denied. Entities may qualify.