What is a MUD Tax?
If you have been looking to purchase a home anywhere in the greater Houston metropolitan area you have probably come across terms like “MUD tax” or “no MUD tax”.
MUD stands for “Municipal Utility District”. A MUD tax is an ongoing tax that pays for the water/sewer infrastructure. The MUD can be from 30 cents to $1 depending on the MUD district. A MUD district may cover as little as a neighborhood and as many as several.
Don’t think of it as another tax – think of it as just a different way of paying for your water. No matter where you live, you are paying this one way or another – Texas MUD tax is just another way of billing you.
If you are coming from other areas in the US, you may be more familiar with the term PUD – Public Utility District and are wondering what the difference is.
Wikipedia defines MUD – and differentiates it from a PUD - as:
A Municipal Utility District (MUD) is a special-purpose district or other governmental jurisdiction that provides public utilities (such as electricity, natural gas, sewage treatment, waste collection/management, wholesale telecommunications, water) to the residents of that district. MUD are formed by a vote of the area, and represented by board of directors who are voted on by the local people. As governmental bodies, they are usually nonprofit.
Public Utility Districts (PUD) are similar, but are created by a local government body such as a city or county, but has no authority to levy taxes.
Harris County MUD District 69 defines it as:
A Municipal Utility District (MUD) is a special governmental entity of the State of Texas. Regulated by the Texas Commission on Environmental Quality (TCEQ), the MUD's main function is to provide water and wastewater services within its boundaries. A MUD may collect taxes, charge for services, condemn property, enforce restrictive covenants and make regulations to accomplish its purposes.
An example of a MUD is the Harris County Municipal Utility District No. 102 (the “District”) which was created on June 18, 1975 and services the following subdivisions: Concord Colony, Jamestown Colony, Yorktown Colony, Langham Creek Colony, Georgetown Colony, Charlestown Colony, Bradford Colony, Concord Bridge (Section 6), Concord Bridge North (Section 1), Savannah Estates, Maple Trace, Colonies Commercial; and Waldron Estates. http://www.hcmud102.com/index.html
Harris County Municipal Utility District #18 (HCMUD #18) includes the subdivisions of Hunters Valley, Heatherwood, Western Estates, Hidden Falls and a small section of Lakewood Forest. http://www.hcmud18.com/
To find a list of water districts and their phone numbers see the Harris County Public Health and Environmental Services website – aka: HCPHES – at http://www.hcphes.org/waterdb/getresults.asp
So what do a MUD tax mean to you as a Buyer? It is just something for your toyou’re your agent about as it does impact your monthly bills / payments / cash outlay. But when you talk to your real estate agent, don’t just ask: Is there a MUD Tax? Be sure to also ask: How much is the MUD Tax?
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