Real Estate in West Houston, Katy, and Sugar Land
Stephen Krueger

Tax Rates and House Payments

When people think of mortgage payments they usually think of the amount they are paying back to the mortgage company for the loan on their home.  Sometime we forget the payment most likely includes a payment to the escrow account too.   This is like a savings account that is used to pay your taxes and insurance once a year.  Taxes are the largest part of the escrow accounts balance.

Keeping this in mind, the market value for a new home isn’t the only important number to think about , the tax rate can be a consideration as well.

Some people feel that property tax is a necessary evil and there is nothing that can be done about it.

The truth is, a good Realtor can help you compare tax rates in different neighborhoods, to help make an informed decision about buying a home in a certain tax district.

Even if you pay cash for a home you will still have to pay the annual taxes which usually consist of county tax, school tax, city tax and some times Municiple Utility District (MUD) tax.   These taxes are based on a percentage of your homes value.  The taxes that can fluctuate greatly are School Taxes and MUD taxes.

There are neighborhoods that are split by the school district the children go to school in.  I have seen others that the home owner could pick the district they wanted to pay, since they were on a dividing line.   The goal here is chose the school district that has the lower rate and is less likely to raise the rate.    School Districts will raise the tax rate in areas of significant growth.  The need for new schools and facilities will cause a potential for increased taxes.

MUD taxes are used to pay for the water and sewer infrastructure in a neighborhood.  When utilities are built out, the utility district will normally sell bonds to raise the money to build the water and sewer systems.   In order to pay the bonds back they use tax payer dollars to pay off the bonds.   Once the bonds are paid back the tax rate will lower.  This being said, it you find a home in an older utility district your tax rate will be lower.  A good Realtor will know the sweet spots for the older MUDs and be able to get you a home you love with a lower tax rate.

Please contact me with any questions regarding tax rates and how they can affect you.  832-267-4647


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