Shopping for a newer home in Pearland, Manvel, Iowa Colony or the Houston suburbs? Then you will run into MUD taxes. They are normal in Texas, but they can add hundreds of dollars a month to a payment, so it pays to understand them before you make an offer.

What Is a MUD?

A Municipal Utility District (MUD) is a local government district created under the Texas Water Code to pay for the water, sewer, drainage and sometimes roads and parks that serve a new subdivision. Instead of a city or the developer paying for all of it up front, the MUD sells bonds, builds the infrastructure, and repays the bonds over time with a property tax on the homes inside the district.

That is why so many master-planned communities around Houston, such as those along Highway 288 in Pearland, Manvel and Iowa Colony, have a MUD tax. Older neighborhoods inside established city limits usually do not.

How Much Is a MUD Tax?

MUD tax rates are set per $100 of your home's taxable value, and they vary widely:

  • On Brazoria County's official 2025 tax rate list, MUD rates ranged from about $0.08 to $1.50 per $100 of value. For comparison, the City of Pearland's rate was about $0.63.
  • Older, more established MUDs tend to have lower rates. Brand-new districts that are still issuing bonds often have the highest rates.

What that means in dollars: on a $350,000 home, a MUD rate of $1.00 per $100 adds about $3,500 a year, or roughly $290 a month, on top of your other property taxes. A rate of $0.50 adds about $1,750 a year. Exemptions can lower the taxable value a bit.

The Notice to Purchaser

Texas law requires the seller to give you a written Notice to Purchaser of Special Taxing or Assessment District before you sign a binding contract. Since September 2023 it uses a standard statewide form. It tells you:

  • The district's current (or projected) tax rate per $100 of value
  • How much in bonds voters have approved and how much has already been issued
  • Any standby fees
  • The district's purpose, and that the cost of district facilities is not included in the price of your home

If you were not given the notice before signing, Texas law gives you rights, including the right to terminate the contract in some cases. The signed notice is recorded with the deed at closing. Read it carefully, and ask your agent how the MUD rate compares to nearby neighborhoods.

How to Look Up a Home's MUD and Tax Rate

  • Appraisal district: search the address on HCAD (Harris County) or Brazoria CAD. The account shows every taxing jurisdiction for the property, including any MUD.
  • Tax rate lists: each appraisal district publishes the current rates for every jurisdiction.
  • TCEQ Water District Database: the Texas Commission on Environmental Quality keeps a database of water districts.
  • The listing and seller's documents: your agent can pull the MUD notice and total tax rate before you write an offer.

Do MUD Taxes Go Away?

Sometimes they go down. As the district pays off its bonds and more homes are built, the rate can fall. But districts can also issue new bonds, so rates do not always drop. If a city annexes the area, the MUD may be dissolved and the city takes over its debt and services. There is no guarantee either way, so budget for the current rate.

Is a Home in a MUD a Bad Deal?

Not necessarily. MUD communities often have newer homes, pools, parks, trails and good drainage infrastructure. The key is to compare the total monthly cost, including the full tax rate, HOA dues and insurance, against homes outside a MUD. A home with a lower price and a high MUD rate can cost more per month than a pricier home with no MUD.

Also file your homestead exemption after you close. It lowers the taxable value for many of your taxing units.

Talk to a Local Agent

We check the MUD, HOA and total tax rate on every home before our clients make an offer, especially in Shadow Creek Ranch, Meridiana, Massey Oaks and the rest of the Pearland and Manvel area. Contact us or call 713-996-9755.

Sources: Texas Water Code sections 49.452 and 49.4521; Brazoria CAD 2025 tax rates; TCEQ water districts. General information only, not tax or legal advice.