Do MUD tax rates go down over time? (Houston, Cinco Ranch: HOA, attorneys)

[gettingerb]

So I've noticed that most of the new neighborhoods have the highest MUD tax rates and more established neighborhoods like Cinco Ranch and Houston proper have rates closer to 2.5%. Is this difference because those more established neighborhoods have paid off their bond financed infrastructure?

If so I would have expected Shadow Creek Ranch to have a rate less than 3.6% since its been around for a while.

[Texas Ag 93]

Sure, just like tollroads pay for themselves and then become freeways as initially promised, right?

[Restrain]

It all depends on the infrastructure costs, operations costs, etc. just because it has been around doesn't mean that its costs go down. If a MUD had a higher initial cost going in, or if the contracts for water acquisition or sewage are higher due to service, the costs will be higher. You can't compare one MUD directly to another, have to drill down and look at the operation. But again equal MUDs can have different costs due to the efficiencies of management.

I know that this didn't give you a concrete answer, but there is no one-size-fits-all costs for a MUD.

[ipuck]

They do. Most of the subdivisions special MUD do go down after they are paid off, which is usually 10+ years.

[War Beagle]

Sometimes MUDs last for decades. They are a great way for attorneys and water companies to make money.

[Failed Engineer]

MUDs can last a long time, and each one is different. I'd say you could expect them to last about 20 years. Their rate can also go down. I owned a home in Shadow Creek Ranch awhile back for several years and recall rates above 4 for the first couple years of ownership before settling in around 3.8% for the last few years. I don't know the reasons behind the drop. Maybe more homes built = more revenue to pay off bonds? Not sure.

[Sollaces]

Even if everything is paid off, then things start to break and costs go towards maintenance.


I don't think it's more homes = more revenue to pay things off. Like the HOA dues. Those jumped a lot in both Cinco Ranch and in Cinco SW. Old Cinco is now built out but I can see costs still going up.

[hbcu]

like the toll road...they tell you its time for tolls to expire and then its renewed for "maintenance" of the roads or in some cases, it keeps a few people employed forever since its tagged to state bills.

[Dopo]

Originally Posted by hbcu

like the toll road...they tell you its time for tolls to expire and then its renewed for "maintenance" of the roads or in some cases, it keeps a few people employed forever since its tagged to state bills.

I wish that was their excuse,
they say the money is to build other toll roads

[jtothemak]

Yes MUD rates over time will go down once a MUD is fully built out is typically when it will start to happen but it is a very slow process. Values of properties going up also help since it brings in more revenue which allows for a lower rate. It also depends how well the MUD is being managed. My last neighborhood the rate dropped a little bit the last 2 year we where there.

Guess the lesson of the story if you are buying in a new neighborhood that is still building don't count on much tax relief unless you plan on living in the home for 10+ years.