Property Tax on Lake Conroe — Montgomery County and MUD Reality

How Texas Property Tax Works

Texas imposes no state property tax. All property taxes are levied by local government entities — county, school district, city, hospital district, college district, and any special districts including Municipal Utility Districts. Each entity sets its own rate, expressed in dollars per $100 of assessed value. Your total tax bill is the sum of every applicable entity's rate multiplied by your property's assessed value minus applicable exemptions.

The homestead exemption reduces the taxable base for primary residences. For 2026, the school district homestead exemption is $140,000 (increased from $100,000 under SB 4 / Prop 13, approved November 2025). The homestead exemption applies only to your principal residence on January 1 of the tax year. Second homes and investment properties do not qualify. Additionally, homeowners 65 and older receive a freeze on school district taxes — the school district portion of your bill is locked at the amount it was in the year you turned 65 or established your homestead, whichever is later, and cannot increase as long as you are over 65 and maintain the homestead exemption.

The Base County Rate

Montgomery County's county levy is a component of your total bill alongside other entities. For a typical Lake Conroe-area property owner within the City of Conroe and Conroe ISD, the major components are:

• City of Conroe: $0.4272 per $100 (current rate)
• Conroe ISD: the largest share — approximately 50% of the total bill for Conroe ISD homeowners
• Montgomery County: approximately 20% of a typical combined bill
• Lone Star College System: smaller college district levy
• Montgomery County Hospital District: small additional levy

Combined, the typical City of Conroe / Conroe ISD combined rate runs approximately 1.91% of assessed value. A $750,000 home in Conroe proper, with the $140,000 school homestead exemption, has a taxable value of approximately $610,000 for school taxes and $750,000 for all other components. The combined effective bill runs approximately $12,000 to $14,000 per year.

The MUD Multiplier

This is where Lake Conroe property tax becomes unpredictable without specific research. Over 150 Municipal Utility Districts cover parts of Montgomery County. Each was created to finance water and sewer infrastructure for a specific development, and each levies its own annual property tax to service the bonds used to build that infrastructure. As infrastructure bonds are paid off, MUD rates decrease. In newer developments, MUD rates remain high until bonds are retired.

Representative MUD rate ranges in the Lake Conroe area:

• The Woodlands (mature, low MUD): $0.07 to $0.17 per $100
• Established lake communities (paid-down infrastructure): $0.10 to $0.35 per $100
• Mid-stage MUDs: $0.35 to $0.70 per $100
• New-development MUDs with full bond load: $0.80 to $1.00+ per $100

On a $750,000 Lake Conroe home, the difference between a $0.10 MUD rate and a $1.00 MUD rate is $6,750 per year in additional tax. This is a material number that changes the economics of ownership and should be a first-order due diligence question on any Lake Conroe property.

Properties Outside Conroe City Limits

Lake Conroe waterfront is primarily outside the City of Conroe — most lakefront homes are on unincorporated county land or within small waterfront-adjacent cities. Properties outside Conroe city limits do not pay Conroe's $0.4272/$100 city levy, but they do still pay county, ISD, hospital district, and MUD levies. The net effect varies: some outside-city properties have lower combined rates than City of Conroe properties; others, particularly in high-rate MUDs, may run higher total rates despite the absence of the city levy.

Montgomery County has multiple school districts in addition to Conroe ISD — Montgomery ISD, New Caney ISD, Willis ISD, and others. School district rates vary between districts. A homeowner in New Caney ISD territory pays approximately $1,025 more per year in school taxes on the same home value compared to a Conroe ISD homeowner, according to available 2025 rate data.

How to Verify Before You Buy

• Go to mcad-tx.org (Montgomery Central Appraisal District) and search by property address
• In the search result, find the "Taxing Units" or "Jurisdictions" section — this lists every entity levying taxes on that parcel and their current rates
• Identify the MUD specifically and confirm the current rate and whether bonds are still outstanding
• Ask the title company for a line-item property tax breakdown as part of the title search
• Request the seller's most recent property tax statement — this shows what was actually billed for the most recent tax year
• For non-homestead use, calculate without the homestead exemption to understand the full second-home tax burden

Montgomery County tax appraisal protests are common and successful — in 2023, 27% of county residents protested their appraisals, resulting in $78.34 million in combined reductions. The protest deadline is typically May 15 or 30 days after the Notice of Appraised Value is mailed. Lake Conroe waterfront has seen aggressive appraisal increases. Filing a protest annually is standard practice among experienced Lake Conroe property owners.