A buyer comparing a $400,000 house in Audubon to a $400,000 house in The Woodlands is not comparing the same house. Before either party signs, Texas law requires the seller to hand over a Notice to Purchaser of Special Taxing or Assessment District, and that single form is where the two homes stop looking alike. The Water Code gives the buyer a right to walk if that notice arrives late, and the right runs all the way to closing. In a Montgomery County market where the median single-family price sat at $359,100 as of July 2026, and where the county contains more than 150 Municipal Utility Districts, the disclosure is doing more work than most buyers or sellers realize.
The thesis is simple. The portal median is a first price. The MUD tax rate is a second price. And that second price is not set by the market. It is set by a bond amortization schedule.
The number the portal doesn't show you
Median price is commodity data. Combined property tax rate is not, because it depends entirely on which of the county's special districts your parcel sits in. A typical Conroe homeowner outside a MUD sees a combined rate of roughly 1.91% of taxable value, spread across Conroe ISD, the City of Conroe, Montgomery County, Lone Star College, and the Hospital District. Slide the same house into a newer master-planned MUD and the picture changes fast.
| Community / District | MUD-only rate (per $100) | Effective all-in rate |
|---|---|---|
| The Woodlands (mature MUDs) | $0.07 to $0.17 | as low as 1.39% |
| MC MUD 18 (Bentwater) | $0.17 for 2025, down $0.03 YoY | ~1.5% range |
| MC MUD 89 | $0.64, split $0.39 debt and $0.25 maintenance | ~2.0% range |
| Woodforest MUDs | $0.83 per $100 or higher | can exceed 2.5% |
| Audubon (Magnolia, MC MUD 131 + WCID 4) | included in total | $3.0308 per $100 total, set in 2026 |
On a $400,000 taxable value, the spread between a Woodlands parcel at 1.39% and an Audubon parcel at 3.03% is roughly $6,560 per year. That is a second mortgage payment of about $547 a month sitting inside the tax escrow line, invisible on any listing sheet.
Why a new master-planned MUD costs more than a mature one
The mechanism is bond debt, and the mechanism is public. When a district is formed, it issues bonds to build water plants, sewer lines, drainage, and sometimes roads and parks. Property taxes inside the district repay those bonds over decades. As the debt amortizes, the debt-service portion of the rate falls.
MC MUD 89 publishes the arc plainly. The current rate is $0.64 per $100 of taxable value, split into $0.39 for debt service and $0.25 for maintenance, down from $1.39 in 2003, the first year the MUD levied a tax. The district reports $25,065,000 in bonded indebtedness, refinanced when interest rates allowed, with outstanding bonds set to retire in 2034. This is the whole story of a MUD tax rate in one paragraph. New pipes are expensive. Old pipes are paid off.
The Woodlands is the endpoint of that curve. Its mature MUDs average $0.07 to $0.17 per $100, and nine of ten residential MUDs lowered their rates in 2025. Newer master-planned communities are the beginning of the curve, with rates set to service fresh bond issues on infrastructure that opened in the last five years.
The implication for a buyer choosing between a 2005 Woodlands home and a 2024 Audubon or Woodforest home is not a lifestyle question. It is a question about where each parcel sits on a 30-year debt schedule that the district's website will tell you if you ask.
What the same $400,000 actually buys in tax burden
Take three parcels, each with a $400,000 taxable value after homestead, using rates disclosed by the districts and by the Montgomery County Tax Office for tax year 2025.
- The Woodlands, Conroe ISD, mature MUD at $0.10: roughly $5,560 per year in total property taxes at an effective 1.39%.
- Conroe city limits, no MUD: roughly $7,640 at 1.91%.
- New MUD-heavy master-planned home at 2.55% total: roughly $10,200.
- Audubon at the stated 2026 rate of $3.0308: roughly $12,120 before exemptions.
The Audubon and Woodlands numbers are more than $6,500 apart on the same list price. Neither buyer is wrong to pick their community, but a buyer who chose on median price alone has not actually compared the two.
Two facts sharpen the picture further. First, Montgomery County's own rate dropped 21% since 2019, from $0.4767 to $0.3770, while average property values climbed from roughly $241,696 in 2020 to over $416,000 in 2024. Falling rates against rising valuations means bills have kept climbing even where the rate looks friendlier. Second, New Caney ISD's I&S rate sits at the $0.50 statutory maximum, reflecting a $695 million bond package approved in 2023, so the school portion of the bill in that district is running hot for the foreseeable future.
The disclosure that becomes a termination lever
The transaction-side risk is the reason to read the district paperwork before writing an offer, not after. The 2023 legislature repealed the three prior MUD Notice forms and replaced them with Section 49.4521, which sets out required language rather than a specific form, and requires the title "NOTICE TO PURCHASER OF SPECIAL TAXING OR ASSESSMENT DISTRICT" in at least 24-point bold font. The new notice requirements contain more detailed information about tax rates, assessments, and services.
Two operational facts follow. MUDs are required to make the notice available online, to file it with the county property records office, and to keep a current copy on file that can be provided for an administrative fee not to exceed $10. And if a seller's property is in a district, the seller must deliver the statutory notice for the buyer's signature prior to final execution of the purchase contract. Miss that window and the buyer can terminate up to closing.
For a buyer, that is not a nuisance form. It is a formal moment to verify the second price on the parcel before any earnest money is at risk.
A pre-offer sequence that treats the notice as underwriting rather than paperwork:
- Pull the parcel's taxing units from the Montgomery Central Appraisal District record and confirm which MUD, WCID, or PID applies.
- Open the district's own website. Read the current tax rate, the maintenance and debt splits, and the outstanding bond balance. MC MUD 89's page is a good model of what full disclosure looks like.
- Ask the district or its operator for the tax rate history. A rate that has stepped down twice in five years is a different asset than a flat rate on freshly issued bonds.
- Confirm the Notice to Purchaser matches the current tax year and reflects any bond authorization approved since January 1. The Texas Real Estate Commission's voluntary Form 59-0 is one acceptable vehicle.
- Sign the notice before, not with, the contract. This closes the pre-contract termination path entirely.
Where the 2026 exemption actually lands
One number moves in the buyer's favor this year. The $140,000 school district homestead exemption approved as Proposition 13 and SB 4 in November 2025 applies for the 2026 tax year, and saves a typical Conroe ISD homeowner roughly $1,330 per year in school taxes alone. That relief lands on the biggest slice of most bills. Conroe ISD accounts for roughly 50% of a typical Conroe homeowner's property tax bill.
The exemption does not touch the MUD line. A new master-planned district still charges what its bond schedule requires. The exemption softens the school portion of an already lower rate in a mature district by roughly the same absolute dollar amount as it softens the school portion of a much higher rate in a new one. In percentage terms, the buyer in the mature district gets a bigger break relative to their bill. The gap between communities narrows less than a headline about a $140,000 exemption might suggest.
A short FAQ
Does an HOA fee substitute for a MUD tax? No. An HOA is a private assessment for amenities and covenants. A MUD tax is a public ad valorem levy that funds bonded water, sewer, drainage, and sometimes road or park infrastructure. A home can carry both, and in many newer Montgomery County master-planned communities it does.
If I buy inside a MUD, will the rate go down over time? Historically yes, as bonds amortize, though districts can issue new bonds for expansion. MC MUD 89's move from $1.39 in 2003 to $0.64 today is the pattern. The direction is not guaranteed, and reviewing the district's outstanding debt and any authorized-but-unissued bonds is the way to test it.
What if the seller hands me the Notice to Purchaser late? The Water Code lets you terminate the contract up to closing if the notice was not delivered before contract execution. If you close anyway, you generally waive that right, and remedies narrow to a damages window keyed to when the first district tax notice arrives. Talk with your agent and your title company the moment the timing looks off.
Montgomery County is not one market. It is roughly 150 districts stacked on top of a county rate, a school rate, and a hospital rate, and the district you pick determines the second price on the home you buy. If you are weighing communities from The Woodlands out to Magnolia and New Caney, the team at Shad Bogany reads these disclosures for a living and can walk you through the true annual cost of each parcel before you write an offer. Schedule a Free Home Consultation and bring the addresses you are considering. We will show you the second price.
