What is a MUD?
If you are thinking about buying a home in the Spring Texas area, you will soon hear the word MUD. A MUD (Municipal Utility District) is a special governmental entity created by the State of Texas whose main functions are to provide water, sewage, drainage, and other services within its boundaries.
A MUD may levy and collect taxes, issue bonds, charge for services, condemn property, enforce restrictive covenants and make regulations to accomplish its purposes. In the greater (unincorporated) Houston area, there are more than 600 MUDs. Most of these MUDs provide services to one or two subdivisions, residential developments, and commercial properties.
The MUD will bill you monthly for water and sewer. You will also receive an annual property tax bill from your MUD. The annual property tax bill from the MUD is to pay for its bonded indebtedness, general maintenance, and operating expenses. MUD rates vary by MUD. The rates do generally decline over time as the MUD’s operating and debt service cost are shared by more homeowners. MUDs property tax rates range from $0.00 to $1.50 or more per $100 of your property’s assessed value. The majority of our Spring Texas subdivisions have a MUD tax. The newer the subdivision the higher the MUD tax. One Spring TX neighborhood that does not have a MUD tax is Candlelight Hills.
A couple of last things to note … the total property tax rate that is quoted on the various real estate websites includes the taxes from all taxing entities including the MUDS. Also if you are able to itemize on your Federal Income tax return make sure you include your MUD tax because it is a deductible property tax.