MUD vs. PID: What New Construction Buyers in Anna and Celina Need to Know Before Signing

by Kelly Bishop

A MUD and a PID are two different ways Texas neighborhoods pay for infrastructure, and either one can add to your yearly housing cost beyond the standard property tax. A MUD levies a property tax per $100 of assessed value. A PID levies an assessment on your lot. Texas law requires the seller to give you written notice of either one before you are bound to a contract.

This guide explains how each works, which one new-construction buyers in Anna and Celina are most likely to encounter, and how to find the real numbers for a specific home before you sign. Information is current as of September 30, 2026.

Row of single-family homes along a suburban street — Two homes on the same street can carry different district costs, so check each address.

What is a MUD, and how does it affect a new construction homeowner?

A municipal utility district (MUD) is a special district created under Texas law to provide water, sewer and drainage services, and it can levy a property tax to repay its bonds. The statutory MUD notice a seller must give a buyer lists the district's tax rate per $100 of assessed valuation, its bonded indebtedness and any standby fee, under Texas Water Code §49.452.

A MUD rate is not locked in. The Texas Commission on Environmental Quality (TCEQ) explains that districts collecting property taxes must publish a notice of the tax rate before they set or change it, and that district bonds need TCEQ approval and voter approval. See TCEQ's water district resources.

For illustration only, a district rate of $0.50 per $100 applied to a $500,000 assessed value equals $2,500 per year. That arithmetic is not the rate of any real district. The MUD line appears in addition to the county, city and school district taxes on the same bill.

What is a PID, and how is it different from a MUD?

A public improvement district (PID) is an area a city creates to finance infrastructure through special assessments on the properties inside it. The City of Celina describes PID assessments as collected annually and separate from property taxes, with each district governed by a service and assessment plan that is updated every year.

The two differ in how the cost is set and charged:

	MUD	PID
Governing law	Texas Water Code, Chapter 49	Texas Local Government Code, Chapter 372
How it is charged	Property tax rate per $100 of assessed value	Special assessment on the lot, paid annually
Can it change?	The district board can set or change the rate after publishing notice	Set by the service and assessment plan; Anna's city policy bars annual increases once assessments are levied
Buyer notice	Water Code §49.452, signed before a binding contract	Property Code §5.014, delivered by the seller

The PID row reflects Anna's own policy. Another city's terms, or an individual PID's plan, can differ, so read the plan for the specific district.

Which Anna and Celina neighborhoods have PIDs?

Both cities use PIDs to finance new neighborhoods. Celina's PID page lists 27 districts with 2025-26 annual service plan updates, including Cambridge Crossing, Mosaic, Wells North and Wilson Creek Meadows. Anna's January 2025 strategic work plan notes the creation of PIDs for AnaCapri North, Rockhill and Liberty Hills, and the Hurricane Creek PID also falls inside the city.

Anna's PID policy sets buyer-protection expectations: PID installments go on the Collin County tax bill, the assessment term cannot exceed 30 years, and homebuilders must disclose the PID on MLS listings. Sales centers must also post flyers showing the total assessment, average annual installment and equivalent tax rate. That document is the 2021 policy, so confirm current terms with the city.

Some North Texas communities use a MUD instead of, or alongside, a PID. The only way to know is to check the specific address.

How do you find out what a specific new home will cost each year?

Ask for the written district notices before you sign, then verify them against public sources. The price on the contract does not show recurring district costs. Use this checklist:

Ask the builder or seller which districts the address sits in, and get the MUD notice and PID notice in writing before the contract is final.
For a PID, read the current annual service plan update on the city's website and ask whether the assessment can be prepaid.
For a MUD, look up the district through TCEQ's water district resources and read its latest tax rate notice and bond information.
List every taxing unit on the property, including county, city, school district and any special district, and add them together.
Ask a loan officer how district taxes and assessments are counted in qualifying and in escrow.

Why can a new construction home's first tax bill look different from later bills?

Appraisal districts value property as of January 1, so a home that was unfinished on that date is taxed on the portion that existed. Collin Central Appraisal District's FAQ says an unfinished house is added to the roll at a percentage of market value, generally based on completion as of January 1.

That means a first-year bill can reflect only part of the finished home, and a later bill can reflect all of it. Plan your budget around the completed home's value, not the first statement. Your lender and your agent can help you estimate the year-two picture.

How should MUD and PID costs factor into comparing a new build with a resale home?

Compare the total yearly cost of ownership, not just the purchase price. Two homes at the same price can carry very different annual costs if one sits in a district and the other does not. A resale home outside any district has no MUD or PID line, while a newer community may have one or both.

Builders also negotiate differently from individual sellers, and their incentives change the comparison. For more on that dynamic, read why selling in Anna is different than selling in Plano. A buyer's agent can pull district notices and recent closed sales for both options side by side.

Who can help you compare a new build in Anna or Celina?

Rise Realty Texas agents represent buyers across Collin, Denton and Grayson counties and the DFW Metroplex. Call (888) 774-7315 or start at riserealtytexas.com to talk with an agent or with Kelly Bishop, our Texas Broker of Record. For financing questions, including how district costs are treated in qualifying, contact Tried & True Home Loans at 866-344-8845 (NMLS ID 2034819).

Frequently asked questions

What is the difference between a MUD and a PID in Texas?

A MUD is a special district that levies a property tax, expressed as a rate per $100 of assessed value, to pay for water, sewer and drainage infrastructure. A PID is a city-created area where a special assessment on each lot pays for public improvements. Both can appear in addition to regular property taxes.

Do I have to be told about a MUD or PID before I buy?

Yes. Texas Water Code §49.452 requires a seller in a MUD to give the buyer a written notice, and Texas Property Code §5.014 requires a seller in a PID to give a written notice. TREC's resale contract also lists both notices. Read them before you sign.

Where do PID assessments show up?

In Anna, the city's PID policy provides for PID installments to be included on the Collin County tax bill. Celina states that PID assessments are collected annually and are separate from property taxes. Check the plan for your specific district.

Can a MUD tax rate change?

Yes. A district board can set or change its tax rate, and districts that collect property taxes must publish notice of the rate before doing so. Ask for the most recent rate notice and the district's bond information.

Why is the first tax bill on a new home sometimes lower than later bills?

Appraisal districts value property as of January 1. A home that was not finished on that date is added at a percentage of market value based on its completion, so later bills can reflect the full value of the finished home.

Where does the information in this article come from?

This article is general information, current as of September 30, 2026, and is not legal, tax or lending advice. District tax rates, assessments and city policies change and vary by neighborhood. Confirm details for a specific property with the seller's written notices, the taxing entities and a licensed Texas real estate professional or attorney, and loan options with a licensed loan officer. Rise Realty Texas LLC (TREC #9016637-BB) does not originate loans and refers mortgage business to Tried & True Home Loans (NMLS ID 2034819); verify licenses at NMLS Consumer Access. Equal Housing Opportunity. Equal Housing Lender.