When most people think of investing, they picture the stock market or real estate—but few look at tax liens, and even fewer consider them in a place like Montana. That’s a mistake. While Montana isn’t as high-profile as Florida or Arizona when it comes to tax lien investing, it holds some seriously under-the-radar opportunities for those willing to dig a little deeper.

In this guide, we’re going to pull back the curtain on Montana tax liens. You’ll learn how the system works, how to get started, and what makes Montana a uniquely attractive place for savvy investors.

How Montana’s Tax Lien System Works

Let’s start with the basics—because Montana doesn’t handle tax liens exactly like every other state. It’s not a “tax deed” state like California or Texas. Instead, Montana operates a tax lien certificate system, which gives you, the investor, a shot at both regular interest payments and potentially taking ownership of the property.

The Process in a Nutshell

Here’s how it works:

• Delinquent Property Taxes – When a Montana property owner doesn’t pay their taxes, the county puts a tax lien on the property.
• Tax Lien Sale – Investors can buy this lien at an annual tax lien certificate sale, usually held in July or August.
• Interest Accrual – You, the lienholder, earn 10% interest annually, plus penalties and fees.
• Redemption Period – The property owner has 3 years to pay you back. If they don’t, you can start foreclosure proceedings to obtain the deed.

Unlike in other states, Montana uses a “bid-down ownership interest” method instead of an interest-rate auction. That’s where things get really interesting.

What Is a Bid-Down Ownership Interest?

Rather than bidding down the interest rate, Montana tax lien sales involve bidding on how much of the property you’re willing to accept if the lien isn’t paid. Sounds wild, right?

Here’s an example:

Bidder	Ownership Interest Bid	Outcome if Redeemed	Outcome if Not Redeemed
You	100%	10% interest earned	You can foreclose and get 100% of property
Another	90%	10% interest earned	They get 90% of property if not redeemed

The lowest acceptable ownership stake wins the bid. So, if you’re willing to take 100% ownership, you’re a stronger candidate—but that also comes with risk. The more you’re willing to accept if the owner defaults, the more risk you’re shouldering if the property turns out to be worthless or problematic.

Why Montana Is a Hidden Gem for Tax Lien Investors

If you’re new to tax lien investing, you might be wondering: Why bother with Montana when you could go somewhere more “popular”?

Let’s break down what makes Big Sky Country worth your attention.

Less Competition

Montana isn’t exactly swarming with tax lien investors. That’s a big plus. Fewer bidders mean a greater chance of snagging a profitable lien without getting into a bidding war.

In some of the more saturated states, tax lien auctions are like the Wild West—cutthroat competition, complex rules, and aggressive investors. In Montana, things tend to be more relaxed, and that gives you breathing room to do your due diligence and make smarter choices.

High Interest with a Long Redemption Period

Montana offers a 10% interest rate annually, which is very competitive. And with a 3-year redemption period, that interest can really add up—especially if the property owner takes their time paying back the taxes.

Plus, that extended timeline gives you more runway to prepare for a potential foreclosure and property acquisition.

Opportunities in Rural and Undervalued Markets

Montana is a huge state with vast tracts of land. Many of the tax liens come from rural areas or small towns, where land can be undervalued by market standards. You may find agricultural land, vacation properties, or even mining and timber plots among the tax lien listings.

Savvy investors who know how to research these parcels—using GIS tools, county records, and satellite imagery—can uncover diamonds in the rough.

How to Get Started with Montana Tax Lien Investing

Ready to take the plunge? Here’s what you’ll need to do to start investing in Montana tax liens.

Step 1: Choose Your Counties

Montana has 56 counties, and each one handles its tax lien sales a little differently. Some hold public auctions, others go through a sealed bid process, and a few may even sell liens over the counter if no one bids on them during the auction.

Start by visiting county treasurer websites or contacting them directly. A few of the more active counties include:

• Yellowstone County
• Missoula County
• Flathead County
• Gallatin County
• Cascade County

Step 2: Do Your Research

Before you ever place a bid, it’s essential to do your homework:

• Check the property’s location and value
• Verify zoning laws and land use restrictions
• Make sure there are no environmental red flags
• Look at any existing liens or mortgages

Montana doesn’t wipe out other liens in a tax lien sale, so you’ll want to be extra cautious before bidding.

Step 3: Attend the Sale or Submit Your Bid

Once you’ve found a property and done your research, it’s time to submit your bid. Depending on the county, this might be:

• In-person at the courthouse
• Via mail in a sealed envelope
• Through an online auction platform

Be prepared with your payment (usually certified funds) and your bid sheet filled out correctly.

Step 4: Wait, Monitor, and Possibly Foreclose

Once you own the lien, you’ll collect interest until the redemption deadline. If the property owner doesn’t redeem within 3 years, you can initiate foreclosure proceedings.

But—and this is important—you must file certain notices during that period to preserve your rights. Missing a legal step can cost you the property. Some counties require you to notify the owner annually. Others want you to file affidavits or declarations of intent to foreclose.

Frequently Asked Questions (FAQs)

Is Montana a tax lien or tax deed state?
Montana is a tax lien state. Investors buy tax lien certificates—not the property itself—though you can eventually acquire the property through foreclosure if the lien isn’t redeemed.

How much interest can I earn on Montana tax liens?
You’ll earn a 10% annual interest rate, plus additional penalties and fees. That interest accrues from the date of the sale until the owner redeems the lien.

Can I buy Montana tax liens online?
It depends on the county. Some conduct in-person sales only, while others may accept mail-in or electronic bids. Online sales aren’t as common in Montana as in other states, but this may change over time.

What happens if the property owner doesn’t pay the taxes?
If the taxes remain unpaid after three years, you can initiate foreclosure and potentially obtain ownership of the property. However, proper notices and legal filings must be made throughout the redemption period.

Are Montana tax lien investments risky?
Like all investments, yes—they carry risks. Properties might be worthless, carry other liens, or have environmental issues. But with proper due diligence, you can minimize these risks.

Do I need to live in Montana to invest?
No. Out-of-state investors can participate in Montana’s tax lien sales. Just make sure you follow the specific bidding and legal processes required by the county.

Conclusion: Is Montana Right for You?

Montana’s tax lien system isn’t flashy or overly publicized—but that’s exactly what makes it a goldmine for smart investors. With fewer competitors, a solid 10% return, and the possibility of acquiring real estate, Montana tax liens offer a unique angle in the world of alternative investments.

That said, this isn’t a set-it-and-forget-it kind of strategy. You’ll need to do your homework, understand the legal steps, and keep good records. But if you’re up for the challenge, the Big Sky Country might just offer big-time returns on your investment.

Whether you’re new to tax lien investing or just looking to expand into lesser-known markets, Montana deserves a spot on your radar.