What is the difference in a PID Assessment and MUD Taxes?MUD Taxes, or Municipal Utility District Taxes, and PID Taxes, or Public Improvement District is an additional assessments above standard
DFW MUD and PID Taxes, Are They a Factor in Where You Choose To Buy?
Dated: November 30 2018
What is the difference in a PID Assessment and MUD Taxes?
MUD Taxes, or Municipal Utility District Taxes, and PID Taxes, or Public Improvement District is an additional assessments above standard property taxation. MUD taxes generally have no expiration date, but as more homes are constructed in MUD districts, MUD taxes can decrease or be eliminated over time. PID assessments, unlike tax rates for MUDs, are fixed once the bonds are sold. A homeowner would know the annual assessment bill at the time of purchase. PIDs can also be paid in full up front, versus prorated year by year during the years the PID is active. PID’s have a set duration and can run from 20 to 40 years in duration.
The purpose for these “special assessments” is to fund new infrastructure development when the standard tax base alone is insufficient. Many times, communities with PID assessments or MUD taxes, have slightly lower competitive home pricing to reflect the added tax burden. Some communities eliminate PID or MUD taxation by charging more for their lots.
At the rate the Dallas Fort Worth area is growing, there is an overage cost for new infrastructure in locations that do not have a sufficient tax base to fund development. Both MUD taxes and PID assessments are tax deductible.