When you're buying a new home in Texas, all the fees that appear on your tax bill may be confusing at first. MUD, PID — so many acronyms and not enough explanation! We wanted to clear the air and explain MUD vs PID taxes, so that you can feel confident moving into the role of homeowner. While these taxes may seem intimidating, they are all actually big parts of what makes living in Texas so great!
MUD stands for Municipal Utility District and is a subdivision of the State of Texas that is created to build infrastructure and provide services like water, sewer, and stormwater drainage in areas where a city cannot provide them. This typically happens when a new residential development is built just outside of a city's public water services.
The MUD tax on your bill is your household's contribution to build this new infrastructure to provide water services to your property and neighborhood. Over time, the MUD tax decreases as the initial bill is paid. In 20-30 years, your MUD tax could be virtually zero.
For more on MUD taxes, read our latest blog post What is a MUD Tax and why Does it Matter?
A PID is a Property Improvement District is a special district created by a city or county that allows it to charge an assessment to properties within a certain area (like a new neighborhood) in order to build out additional infrastructure. While MUDs typically focus on water services, a PID tax would pay for:
PID taxes end when the tax levied against a property (like a home) is paid in full. PID taxes may be spread out over 20-40 years, or they may be paid in-full and up-front by the homeowner.
So while MUD and PID taxes may feel like a headache to pay every month, you are actually enjoying the benefits of them every single day when you live in a brand new community. Every time you drive on a well-paved road, go to a beautiful park with your kids, or watch the rainwater drain away from your property without a hitch, you know that your MUD and PID taxes are working for you! See your Sales Counselor or New Home Specialist for more information on whether your community of interest requires a PID and/or MUD tax.
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Our History Maker experience has been amazing. Nick the agent that helped us is very knowledgeable and helpful. He always is available and cooperative. Nick and Julia work together and she also helped us and was also very professional and nice to us through the process of buying our house. Robert the builder is someone you do not meet in a normal buying a home experience. He has been outstanding and thorough with each and every aspect of purchasing this home. If we encountered an issue he has been unbelievably prompt and the quality of his work has been excellent...
The staff of Nick, Julia, and Robert is an A+ in every single aspect of buying a home. A+ quality, professionalism, and cooperation!