Where your tax bill goes

The chart shows four columns, each representing a $400,000 home in a different part of the Houston metro: inside the City of Houston (ZIP 77009), a typical Katy Municipal Utility District, a typical Sugar Land MUD, and a typical Pearland MUD. Each column is a stack of layers — every layer is a separate government that has levied its own ad valorem tax rate against your property.

The bottom layers are broadly similar across all four metros. Harris County, the Harris County Flood Control District, the Harris County Hospital District (Harris Health), the Port of Houston Authority, and the Harris County Department of Education all cover roughly the same geographic footprint regardless of whether you live inside city limits or twenty miles out in a master-planned suburb. HISD or the applicable suburban ISD covers the school layer. Houston Community College covers the college layer.

The divergence happens at the top: the city or MUD layer.

Inside Houston (ZIP 77009), there's a City of Houston rate — $0.519190 per $100 of appraised value for FY2026 — and no MUD. The City of Houston provides water, sewer, and drainage directly through Houston Public Works. The infrastructure that MUDs exist to build and operate simply isn't there to pay for.

Outside city limits, the City of Houston disappears from the stack. What appears instead is the MUD — a Municipal Utility District created under Texas Water Code Chapter 54. The MUD's rate occupies that slot in the stack, but it's doing a different job: paying off the bonds that financed the roads, water lines, and sewer systems the developer built before any homes were sold.

That's the key number to notice. A MUD rate in a new-build Katy or Pearland suburb can range from $0.20 to over $1.00 per $100 of appraised value, depending on how much bond debt the district is carrying and how far along its build-out is. On a $400,000 home, a $0.80 MUD rate adds $3,200 to your annual bill — enough to swing the real effective tax rate from “roughly what the realtor quoted” to “a few thousand dollars a year more than you expected.”

If you're buying in a suburb, the single most important thing you can do before closing is read the §5.014 MUD disclosure notice in your closing packet. Texas Property Code §5.014 requires sellers to provide written notice of MUD inclusion before closing. In practice, these notices are present and rarely read.

Three questions to ask before you sign:

1. What is this MUD's current debt-service (I&S) rate, separate from its M&O rate? The Maintenance & Operations rate can drop as the community builds out and per-home operating costs fall. The Interest & Sinking rate is locked in by the bond schedule — 20 to 30 years is typical — and that's the number you're committing to when you sign.
2. When does the latest bond series mature? A district that issued bonds in 2022 will carry that debt service load well into the 2040s. A district whose bonds mature in 2027 is about to get a lot cheaper.
3. Is the board still developer-controlled? Under Texas Water Code §49.051, a MUD's five-director board is elected by the property owners of record within the district. In the early years of a new community, the developer controls most of those lots and effectively controls the board. Board composition transitions as residents register and vote; the timeline varies widely.

If you already own in a MUD, your adopted rate is public record. The Texas Comptroller publishes an annual Special Purpose District Rates and Levies file (XLSX) listing every water district in the state with its adopted rate. The TCEQ Water Districts database lists every MUD by district number, creation date, and county. The City of Katy's “Find My MUD” tool at cityofkaty.com lets you enter an address and identify your district.

The Houston 77009 rate stack was assembled from public filings: the City of Houston FY2026 Adopted Budget (City rate: $0.519190/$100), HISD's adopted 2025 rate ($0.8783/$100 total: $0.7116 M&O + $0.1667 I&S), and published Harris County entity rates (general fund, Flood Control, Harris Health, Port of Houston, HCDE). The jurisdiction map for 77009 was verified structurally: parcels inside the City of Houston's full-purpose annexation boundary have no active MUD layer — the City provides water and sewer directly.

The suburban MUD figures are composite illustrative rates based on actual published district data. ¹ Source data includes Fort Bend County Appraisal District tax rates (fbcad.org, 2024 published roster), covering Fort Bend MUDs 130, 134B, 134C, 137, 138, 139, 182, Cinco Ranch MUDs 1–12, Sienna MUDs 3–4, and First Colony MUDs 9–10; and Brazoria County MUD filings for BCMUD 2, 3, 6, and 21 (individual district notices, 2024). Rates in the Katy area range from $0.12/$100 (mature, debt-paid) to over $1.07/$100 (newly-formed, debt-heavy). The composite figures represent a typical new-build suburban MUD in each metro — not any specific district.

For the authoritative statewide rate file: Texas Comptroller, “Special Purpose District Rates and Levies” (XLSX), updated annually at comptroller.texas.gov/taxes/property-tax/. The TCEQ Water Districts database (tceq.texas.gov) is the master registry of all Texas water districts by creation order and county.

Statutory basis: Texas Water Code Chapter 49 (general water district provisions) and Chapter 54 (Municipal Utility Districts specifically). The MUD creation and governance framework — TCEQ petition, confirmation election, bond authorization — is in Chapter 49. Texas Property Code §5.014 governs the seller disclosure requirement.