Why Two Liberty Hill Homes at the Same Price Can Carry Very Different Tax Bills

A buyer comparing two listings in Santa Rita Ranch this month might find them priced within a few thousand dollars of each other, built by the same production builder, on lots that back up to nearly identical greenbelt. The floor plans match. The finishes match. The HOA dues match. And yet the actual monthly cost of owning one versus the other can differ by more than a hundred dollars, every month, for years, because of a line on the tax bill that most buyers glance past on the way to the loan estimate: the Municipal Utility District rate.

That rate is not fixed. It moves, sometimes down, sometimes up, and the direction depends on something the listing price never shows: how far along the district is in paying off the bonds that built the streets, water lines, and drainage under the neighborhood.

The rate that changed five times in five years

Santa Rita Ranch, the master-planned community straddling the Liberty Hill and Georgetown line off Ronald Reagan Boulevard, is a useful case study because its combined tax rate has been public and trackable for years. Here is how the total rate on homes in that community has moved, tax year over tax year:

The pattern is not a straight line. It falls for two years, ticks back up in 2024, then falls again in 2025. That wobble is the actual story here, more than the overall downward drift, because it shows the rate is not simply decaying on a schedule the way a mortgage amortizes. It is being recalculated every year against two moving numbers.

Why the rate moves in both directions

A MUD tax rate is set by dividing what the district needs to collect for debt service and operations by the total taxable value of every property inside its boundaries. Both halves of that equation change constantly in a community still building out.

• When a new phase opens and the district issues additional bonds to fund the infrastructure for it, the debt service side goes up, which can push the rate up even while the older sections of the community keep appreciating.
• When appraised values across the district climb faster than the debt payments due that year, the rate comes down, because the same dollar amount is now being spread across a larger taxable base.

That is almost certainly what happened between 2023 and 2024 in Santa Rita Ranch: enough new debt or reappraisal movement pushed the combined rate up by roughly a tenth of a percentage point before the broader growth in the tax base pulled it back down the following year. A buyer who only sees the sale price on the day they tour the home has no way of knowing which of these forces is currently active in the specific phase they are looking at.

What the swing actually costs

Run the 2021 and 2025 rates against the same hypothetical $500,000 home to see why this matters in real dollars, understanding that actual assessed value would rarely stay perfectly flat over four years:

• At the 2021 rate of 2.7048%, the annual tax bill on that value comes to $13,524.
• At the 2025 rate of 2.2171%, the same value produces $11,085.50.

That is a difference of roughly $2,438 a year, or about $203 a month, purely from where the community sat on its debt-repayment curve in a given year. Even the smaller swing between 2023 and 2024, when the rate rose from 2.2571% to 2.3793%, adds up to about $611 a year, or roughly $51 a month, on that same value. Neither of these numbers shows up anywhere in a listing description. Both show up on the first tax bill after closing.

Not every Liberty Hill community carries the same structure

Liberty Hill has grown fast enough that a buyer touring the area in a single weekend can cross through several different financing structures without realizing it. Santa Rita Ranch, Rancho Sienna, Bar W Ranch, Clearwater Ranch, and Larkspur are all active master-planned communities in the area, and while several rely on MUDs to fund infrastructure, not every district works the same way or sits at the same point in its bond schedule. Liberty Parke, one of the community names buyers will see in Liberty Hill listings, was actually built around a Public Improvement District rather than a MUD, a structure the city authorized back in 2016 and has only recently put a formal policy around.

The distinction matters because a PID assessment is typically a fixed obligation tied to lot size or assessed value for a set number of years, while a MUD tax rate is recalculated annually and can move with debt issuance and appraisal growth the way Santa Rita Ranch's has. Two communities can both carry an extra charge beyond the base county and school tax, and still behave in completely different ways over the life of ownership.

Separately, Liberty Hill's own city government has its own tax rate layered on top of any MUD or PID a property might sit in. Heading into fiscal year 2025-2026, the city council set a proposed maximum tax rate of $0.469407 per $100 of value when it took up the budget in August 2025, the rate that funds core city services. A MUD's own portion is separate from that and gets added on top when a property sits inside both the city and a district, which is one reason the all-in rate on a new-construction home in a growing corridor can look so much higher than the city rate by itself would suggest.

The city's rulebook for this is still fairly new

Liberty Hill has been approving these financing districts for a decade, but it only wrote formal guidelines for evaluating them a few years ago. The city's PID policy, adopted through Resolution 2023-R-003 in January 2023, exists specifically to give the council clearer guidelines for weighing future districts as the town keeps annexing new development. That timeline is worth knowing for anyone comparing an established community against a newer one still in early phases: sections approved after 2023 are being evaluated under a more structured process than the ones approved before it, but they are also the ones most likely to still be issuing debt and carrying the rate wobble described above.

State law already requires this to be disclosed. Since September 2021, Texas Property Code Section 5.014 has required sellers to notify buyers if a property sits in a PID, typically through a signed addendum at closing. MUD disclosures follow a similar path through the district itself. The paperwork exists. The habit of actually reading it before making an offer is the part most buyers skip.

Questions worth asking before you write an offer

• What is the current combined tax rate for this specific phase, not just the community's marketing materials from when it launched?
• Is the MUD planning to issue additional bonds for phases still under construction, and would that affect the rate on an already-built section?
• Does this property sit in a MUD, a PID, or both, and how long is the assessment or bond schedule expected to run?
• How has the rate moved over the past three to five tax years, and is that movement trending toward a payoff or reflecting new debt for expansion?

Williamson County's own tax rate worksheet directory publishes these figures by district and by year, which is the most direct way to check a specific MUD's history before assuming a listing agent's summary tells the whole story.

A few questions we hear often

Is a MUD tax the same thing as an HOA fee? No. An HOA fee goes to a homeowners association for community amenities and maintenance. A MUD tax is a property tax collected by a public taxing entity to repay bonds issued for infrastructure like water, sewer, and drainage, and it shows up as its own line on the county tax bill alongside school and county taxes.

Does a MUD tax ever go away? It can decline as bonds are retired, and in some cases a district dissolves or is absorbed into city-provided utilities once its debt is paid off, at which point the separate line disappears from the bill. How long that takes depends on the specific district's original bond term and how much new debt has been issued along the way.

Where do I find the current rate before I make an offer? Ask for the property's most recent county tax statement, which will list every taxing entity separately, and cross-check the MUD or PID name against Williamson County's published worksheets. This is general information, not tax or legal advice, and a licensed tax professional can walk through how any exemption or district specifics apply to a particular property.

If you are weighing a home in Santa Rita Ranch against one in Rancho Sienna, Bar W Ranch, or another Liberty Hill community and want the actual current tax worksheet pulled for the specific phase you are considering, Oak & Willow Realty Group can walk through that math with you before you write an offer. And if a move to Liberty Hill depends on selling a home first, start with a conversation about a free home valuation so both sides of the transaction line up before you commit to either one.