In Texas, your municipal district assesses a MUD tax on top of your property taxes. MUD stands for Municipal Utility District. The MUD tax is a fee that helps fund the development and maintenance of infrastructure in areas with new homes. The MUD tax is often costly, depending on where you live in the state. Let’s look at how to lower your yearly property taxes, even if you still pay the MUD tax.
What is a MUD Tax?
A MUD tax is a fee that helps fund the development and maintenance of infrastructure in areas where there are newer homes. The MUD tax can be costly, depending on where you live in the state. For a $300,000 home, the MUD tax can be as much as $4,200 per year! (1)
When Is a MUD Tax Higher?
If you live in an area with a MUD, your property taxes will be higher than if you didn’t have a MUD. However, there are ways to lower your yearly property taxes, even if you still must pay the MUD tax. Keep reading to find out more!
Why Is There a MUD Tax?
Texas lawmakers created municipal Utility Districts in 1949 to finance water and sewer projects in rural areas that lacked the resources to build their own infrastructure. Today, MUDs exist all over Texas, from rural areas to the outskirts of major cities. Boards of directors elected by the MUD’s property owners govern the MUD.
What Is The MUD Tax Used For?
The MUD board sets the tax amounts within its boundaries. This tax is in addition to your regular property taxes and goes to the MUD, not your county or city government.
MUDs use the money from the MUD tax to finance water and sewer projects, as well as roads, parks, and other infrastructure within the MUD boundaries. The amount of the MUD tax can vary significantly from one MUD to another, depending on what projects the MUD is currently financing.
Why Is the MUD Tax a Big Deal?
The MUD tax can be a significant burden on property owners in some cases. For example, if you live in a MUD financing a large water project, your MUD tax could be several thousand dollars per year. However, there are ways to lower your MUD tax bill.
4 Ways to Lower Your MUD Tax
One way to lower your MUD tax bill is to negotiate with the MUD board. If you think the MUD tax is too high, you can contact the MUD board and ask them to lower the tax rate. In some cases, the MUD board may be willing to negotiate a lower tax rate for all property owners in the MUD.
You can also try to get an exemption from the MUD tax. MUDs are required to offer an exemption for properties used for agricultural purposes. If your property is for agricultural purposes, you may be eligible for an exemption from the MUD tax.
Another tactic is to vote out the MUD board members raising your taxes. As a property owner, if you don’t like how your MUD board works, you can exercise your right to vote out the MUD board members raising your taxes. You can vote in your MUD elections, typically held in May. So if you’re unhappy with your MUD tax bill, make sure to get out and vote!
Finally, you can lower your MUD tax bill by appealing the appraised value of your property. The MUD board uses the appraised value of your property to calculate your MUD tax bill. So if you think your property appraised too high, you can file an appeal with the county appraisal district.
Your home may be one of many taxed homes that never received an actual in-person appraisal. Many residents don’t realize that the district sending the tax bill has never sent an appraiser to find the value of their home!
According to Texas Home Appraisers, ” In most cases the ‘proposed value’ of your home is based off of a mass appraisal techniques utilized by each county appraisal district. This practice is common since no appraisal district has the manpower or time available to appraise each and every home individually To manage such a large workload the appraisal district uses a mass appraisal system based on typical property values in your area to appraise your entire neighborhood.”
In other words, if you go through the protest process, the county takes a good look at the appraised value of your home for possibly the first time.
Harris County’s iFile system allows you to submit your property value protest online. You can also file your objection in person or by mail at the Appraisal Review Board office in downtown Houston at 1001 Preston, Suite 911, Houston, TX 77002-2023.
You Can Pay Less in Property Taxes
The MUD tax feels like a heavy burden on many Texas property owners, but there are ways to lower your MUD tax bill. If you think your MUD tax is too high, consider appealing the appraised value of your property, negotiating with the MUD board, or getting an exemption from the MUD tax. You can also exercise your right as a property owner and vote out the MUD board members raising your taxes.
DEADLINES TO REMEMBER:
For homestead properties, the early protest deadline is April 30th or 30 days after the date you receive the appraisal district notice of appraised value. Whichever date is later applies.
However, if you miss the new early deadline, you can protest before the regular May 15 deadline.
In the case of other real property, such as land and buildings, the protest deadline is May 15. However, if HCAD mails your appraised value notice after May 1, you may qualify for a later protest deadline.
The May 15 deadline also applies to business and industrial personal property accounts.
We Can Help
At Jarrett Law, we can walk you through the steps you must take to reduce your property tax bill. From initial appraisal to meeting with the three-person panel for a hearing, we are here for you.
Jarrett Law has successfully represented homeowners and business owners in Harris County and the surrounding counties of Fort Bend, Brazoria, Montgomery, Galveston, Waller, Grimes, Walker, Liberty, and Chambers. We know the ins and outs of the property tax system in Texas and can help you save money on your property taxes. Contact us today for a consultation and find out how we can help you.
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