10 Sep What is a MUD and PID district and Why Should You Care?

If you are considering buying property in Texas, it is important to know if it is located in a MUD or PID District.

Why? Because you may have higher overall property taxes. Which if you are a buyer who is stretching their budget, unexpected higher taxes could cause you to no longer qualify.

What is a Municipal Utility District (MUD)?

These are special districts created that provide infrastructure and services, such as water, sewer, and drainage. These are funded through bonds. Since it is paying off a bond, the MUD tax will go down over time because the initial infrastructure costs are eventually repaid.

MUD’s do replace the city tax though!

What is a Property Improvement District (Public Improvement District)?

This 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.

A PID is more commonly used to fund public improvement projects such as streets, sidewalks, landscaping, and parks.

These bonds are issued based on the property’s assessed value. They are a fixed amount and collected over a set number of years and end when the tax levied is paid in full. Property owners do have the option to pay this tax in-full and up-front.

It is good to know that both MUD and PID’s are tax deductible!

How do you know if the property is located in a MUD/PID?

In Texas, a seller is required to provide notice to buyers when selling in one of these districts. If not provided, the buyer has the right to terminate the contract.

Have questions about Real Estate in the Dallas Metroplex? Contact Me 👇

✨Kelli Clark | REALTOR®️
One Source Real Estate
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📱214-695-2066