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If you own a home in Texas built after 1995, you are likely paying a MUD tax. The MUD tax, or Municipal Utility District tax, is a fee that helps fund the development and maintenance of infrastructure in areas with new homes. The cost of the MUD tax varies depending on where you live in the state, but it can be costly. Don’t worry, though – we have some tips for lowering your yearly property taxes, even if you still have to pay the MUD tax!
What is a MUD Tax? Why Do I Have to Pay It?
Municipal Utility Districts (MUDs) are special districts created by the state of Texas that have the power to issue bonds and levy taxes. They use the money from these bonds and taxes to fund infrastructure projects within the district, such as roads, water and sewer lines, and parks.
The MUD tax is a fee that the MUD levies on all properties within a MUD district. The value of your property is a factor that partially determines the MUD tax. Your MUD tax amount also comes from the area where you live.
The MUD tax pays for the bonds issued to finance infrastructure projects within the district. The MUD tax also pays for the ongoing maintenance and operation projects.
How Can I Lower My MUD Tax?
While the MUD tax can be costly, there are some things you can do to lower your MUD tax.
You can try negotiating a payment plan with your county or city government. If you cannot pay your property taxes in full, you may be able to negotiate a payment plan.
If you can’t beat ’em, join ’em. Run for a seat on the MUD board and help make policies yourself. Or you can try contacting your state or local representatives and asking them to lower the MUD tax rate.
By negotiating a payment plan, joining the board, or contacting your representatives, you may be able to lower the amount of your MUD tax bill each year. One other way to reduce your MUD tax is to appeal your property value.
Appeal Your Property Tax Assessment
One way to lower your property taxes is to appeal your property tax assessment. If you think your home has been assessed at a higher value than it should be, you can file an appeal with your county government.
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.
Meeting with the Appraiser
After filing, the first step is receiving your initial scheduling notice for an informal meeting with an HCAD appraiser. You and the appraiser will discuss your evidence and review records to resolve the appraisal value of your home. Many homeowners find that the informal hearing is all they need to work through their issues.
However, if you don’t find common ground with the appraiser, you’ll receive an Appraisal Review Board (ARB)scheduling notice. If you never schedule with the appraiser for the informal hearing, you’ll also receive an Appraisal Review Board scheduling notice. The informal appraisal meeting is not mandatory.
If you can’t resolve the issue with the appraiser, you can schedule with the ARB for your formal hearing. Hiring an attorney to represent you at this hearing can make all the difference in the amount of tax you pay each year.
2022 Deadlines to Watch Out For
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, our experienced real estate attorneys can help you lower your MUD and property tax bill. We know the ins and outs of the appeals process and can represent you at your informal or formal hearing. Contact us today to learn more about how we can help you lower your property taxes in Texas.