New in Houston Property Taxes
A home in Houston is taxed by at least 3 entities – the city, county and school districts. All homeowners
in Texas can claim a yearly exemption of 20% of the total assessed value of their homesteads. The
homestead exemption law applies to state property tax levies. To qualify, homeowners must have title
to a property on January 1 of the current tax year, have signed a mortgage or purchasing contract on or
before January 1 of the current tax year and have filed a Homestead Exemption Affidavit annually with the
county tax assessor’s office. Not all taxing authorities grant this exemption.
Municipal Utility Districts (M.U.D.s)
M.U.D.s provide water, sewer and drainage services in many Houston neighborhoods (often the newer
ones) and play an important role in the region’s ability to develop viable new neighborhoods when services
from municipal water departments are not available. These political districts are started when a developer
chooses a suburban site for potential development. Financing for a M.U.D. is obtained initially through
tax-free municipal bonds and later through taxes and service fees collected from district residents.
