Toll brothers or Trendmaker

[LocalPlanner]

Originally Posted by WRM20

A MUD is a Municipal Utility District, generally created by an election with 2 or 3 voters living in temporary housing(trailers) located within the boundaries of the proposed district. Once the MUD is established, and a Board of Directors elected, debt is issued to fund the construction of infrastructure within the district like roads, sewers, water treatment plants, water delivery pipes, etc. The debt is repaid using taxes imposed on property owners within the district. As houses are sold, taxes are also used to fund capital expenditures related to maintenance of facilities and construction of additional facilities if that becomes necessary.

The taxes per property are based on a rate per $100 of valuation, just like all of the other taxing entity rates. The rate is also based on calculations of how much money is required to fund debt payment and other costs. Regular operating costs for items like water usage and trash pickup are recovered through monthly bills.

As more homes and businesses are constructed, the tax rate should go down. My parents bought in Katy in 1982, and the MUD rate was something like45 cents, it's now under 30 cents. New developments, like Bridgeland, often have MUD rates over a dollar, which means a $300,000 property will pay $3,000 in taxes per year, or more. That's in addition to school taxes, county taxes, emergency services taxes, levee district taxes, etc.

One advantage of MUD taxes is that the home prices aren't increased by the costs of building the infrastructure, which could add $30,000 to $100,000 to a house.

A colleague at work bought a house about 8 years ago that was valued within $10,000 of mine. The combination of MUD tax and higher ISD tax rate meant she paid $4,000 more than I did for my house in the Greater Heights area. One reason I personally will not move to a new MPC is the much higher taxes. When you throw in HOA fees of $1,200 a year, and overbearing HOA management, I'll stay where I am in Houston, with an HOA that is benign and costs $40 a year.

Just to make sure this is clear, the MUD issues debt to reimburse the developer for having funded the infrastructure up front.

[WRM20]

Originally Posted by LocalPlanner

Just to make sure this is clear, the MUD issues debt to reimburse the developer for having funded the infrastructure up front.

Thanks for adding that.

[Purplehippo]

Thank you everyone for all the explanations. Wow, so I guess I was calculating it right! Living in a community with no mud tax is very appealing right now.

[pc50]

Not very many new home communities with no mud tax

[Waffleton]

Originally Posted by pc50

Not very many new home communities with no mud tax

Only ones I could find were LakeHouse and Enclave at Longwood

[Purplehippo]

After doing more digging (Google) I found out that Grayson Woods mud tax is $0.64 but there is an additional $.90/$100 to pay for the bonds needed to purchase the infrastructure to build it! That is why it is so high.