Two $400,000 houses, and one costs $139,000 more
Two $400,000 homes, same loan and rate, and a PID on one tax bill adds $387 a month in this example. What a PID is and the question to ask before touring.
Why would two $400,000 houses have different payments?
Two houses, both $400,000, with the same loan, the same rate and the same insurance. The only difference is the property tax rate, and one of them sits in a Public Improvement District. In this example, that one line on the tax bill adds $387 to the monthly payment.
It is a cost that rarely comes up at the model home, and most buyers do not notice it until it shows up in their payment.
Where does the difference come from?
An illustration only, based on publicly adopted 2025-26 tax rates. Rates for any specific property will be different.
| House A | House B | |
|---|---|---|
| Type | New build, master-planned | Established, built 2016 |
| Tax rate | 3.12%, including a PID assessment | 1.96%, no PID or MUD |
| Taxes per year | $12,480 | $7,840 |
The gap is $4,640 a year, or about $387 a month.
What $387 a month means: at the rates when this was written in October 2026, that is roughly $55,000 more house for the same monthly budget. Held for 30 years at the same rates, the gap adds up to about $139,000, around a third of the purchase price, going to a taxing entity instead of into the owner's equity.
What is a PID?
A Public Improvement District pays for the roads, water lines, drainage, trails and amenities in a development. The money is borrowed up front, and homeowners repay that bond as an assessment on the tax bill, typically over about 20 years.
A PID is not a scam, and it is not hidden. It is disclosed in writing before closing, and owners get something real for it. It is just rarely mentioned on a first visit.
The homestead exemption does not close the gap
The main homestead exemption comes off the school portion of the tax bill, and a PID assessment is not school tax.
What should a buyer ask before touring a model home?
"Is this home in a PID or a MUD (Municipal Utility District), and what is the current assessment rate?"
Get the answer in writing, and ask before falling in love with a floor plan, not after.
And the honest part
The tax rates and figures above are examples based on publicly adopted 2025-26 rates, for illustration only. Rates, assessments and payments vary by property and change over time. Verify the figures for any specific property before relying on them.
Buying in Texas?
The tax rate is one number that changes what a house really costs. Help with the upfront costs is another, and the two-minute quiz narrows the 60-plus Texas homebuyer programs to the ones worth a closer look for someone in this position.