Dallas is proposing its eleventh straight annual cut to its municipal property tax rate this budget cycle, bringing the city's rate down to 69.78 cents per $100 of taxable value. Frisco, meanwhile, is weighing its first rate increase since 2017, to 44.1289 cents. Plano is holding close to flat near 43.76 cents, and McKinney is proposing a modest bump to 41.7876 cents. A Dallas city councilwoman posted a side-by-side of those numbers on X this week, and the comparison spread fast through North Texas real estate circles, because on its face it looks like the suburbs are catching up to the city on cost.
That comparison measures the wrong thing for anyone actually pricing a home in Collin County. The city rate is one slice of a tax bill built from at least four layers, and in the county's fastest-growing subdivisions there is a fifth layer that dwarfs the difference between any two cities' municipal rates. If you are comparing Frisco to McKinney to Celina on the strength of this week's headlines, you are looking at the smallest number on the bill.
What the City's Slice Actually Covers
A property tax bill in Collin County is never just the city. It stacks the city rate with the county rate, the school district rate, and Collin College's rate, and school districts typically carry the largest share by far. Plano ISD's adopted rate for the current fiscal year runs $1.03955 per $100 of assessed value, more than double the city of Plano's own rate. Prosper ISD sits at $1.2141 per $100. Collin County's own rate has not moved in 33 consecutive years, currently $0.149343 per $100, and Collin College adds $0.08122 per $100 on top.
Put those layers together for a typical Plano homeowner and the combined effective rate lands around 1.71 percent of taxable value. On a $500,000 home, that is roughly $8,539 a year before any exemptions, spread across four separate taxing entities that each set their own rate on their own schedule. Collin County's total is already lower than most major Texas metros for a structural reason that has nothing to do with any single city council's vote: the county has no hospital district, which is unusual among Texas's largest counties and keeps the baseline down relative to Dallas County.
None of that shows up in a chart comparing four cities' municipal rates. It is the reason the news coverage of this week's comparison had to immediately caveat itself, noting that a city-only percentage gap does not translate into the same percentage gap on a homeowner's total bill.
The Layer the Comparison Skips Entirely
Here is where Collin County diverges from a straightforward city-by-city tax comparison. The county is the new construction engine of North Texas, with Frisco, Prosper, Celina, McKinney, and Anna adding thousands of homes a year across communities like Trinity Falls, Light Farms, Mosaic, Artesia, Creeks of Legacy, and Painted Tree. Most of that new supply sits inside a Municipal Utility District or a Public Improvement District, and neither shows up in a city tax rate comparison because neither one is a city tax.
A MUD is a special district that issues bonds to pay for the water, sewer, drainage, and road infrastructure a new subdivision needs before the city extends its own services out that far. Homeowners inside the district's boundary repay those bonds through an additional property tax, and in Collin County that MUD assessment commonly runs $2,000 to $7,000 or more per year on top of the city, county, school, and college layers already described above. A PID works differently, layering a special assessment onto the tax bill instead of folding into the rate itself, typically to fund parks, sidewalks, or landscaping inside a defined district. Trinity Falls in McKinney sits inside two such districts, McKinney MUD 1 and McKinney MUD 2, and because the community falls in the city's extraterritorial jurisdiction rather than inside McKinney's city limits, its homeowners pay no city of McKinney property tax at all. Their MUD bill replaces it.
That $2,000 to $7,000 a year is not a rounding error next to the difference between Frisco's proposed 44.1289 cents and McKinney's proposed 41.7876 cents. It can be the difference between two homes at the identical list price carrying meaningfully different monthly escrow payments, depending entirely on which side of a MUD boundary they sit on.
Why the Newest Phase Costs the Most to Carry
The mechanism that makes this genuinely tricky for buyers is timing. A MUD's tax rate is not fixed for the life of the district. It is set to cover bond debt and operating costs, and as more homes get built and more owners share that debt load, the rate typically declines. McKinney MUD 1 cut its rate for fiscal year 2023-24, while McKinney MUD 2 held its rate flat at $1.05 per $100, a level it has kept since the district first levied a tax in 2019. Both patterns illustrate the same underlying rule: districts with fewer rooftops and younger bonds carry the heaviest per-household burden, and that burden eases as the community fills in.
That means the newest phase of a new master-planned community, the one with the freshest model homes and the least finished amenity package, is frequently the most expensive phase to own in relative to its own neighbors a few years down the road. Buyers chasing the newest inventory in Celina or Prosper are often buying at the peak of the district's rate curve, not after it.
Here is how the layers stack across a few Collin County cities considering their 2026 budgets right now:
| City or area | Proposed/current 2026 city rate | School district rate | MUD or PID common in newer subdivisions |
|---|---|---|---|
| Dallas (for comparison) | 69.78 cents | Varies by district | Uncommon in established neighborhoods |
| Frisco | 44.1289 cents (proposed) | Prosper, Lewisville, or Little Elm ISD depending on section | Common in newer sections |
| Plano | 43.76 cents (proposed) | Plano ISD: $1.03955 | Rare, mostly built out |
| McKinney | 41.7876 cents (proposed) | McKinney ISD | Common, including Trinity Falls' MUD 1 and MUD 2 |
| Prosper (town) | Flat rate ceiling matching prior year | Prosper ISD: $1.2141 | Common in newer communities |
Frisco is worth a second look here because it spans both Collin and Denton counties and multiple school districts depending on the section, with Prosper ISD, Lewisville ISD, and Little Elm ISD all holding territory inside the city limits. Two homes with a Frisco address can land in entirely different school tax rates and entirely different MUD or PID exposure.
Prosper's own budget process makes a related point about why a flat rate does not mean a flat bill. The town set its 2026 property tax rate ceiling to match the prior year, but taxable values inside Prosper's growth corridor have climbed fast enough that total revenue collected still rises even with the rate held steady. A homeowner whose city rate never moved can still watch the dollar amount on the bill go up, purely because the appraisal district revalued the property higher.
Before You Compare Two Communities on Price Alone
- Pull the property's actual tax certificate rather than relying on a listing description or a builder's estimate. It lists every taxing entity attached to the parcel, MUD and PID included.
- Ask specifically whether the community sits inside a MUD, and if so, request the district's current rate and the age of its outstanding bonds. A newer district usually means a higher rate today and room for it to decline later.
- Confirm which school district and which specific campus feeder pattern applies, especially in communities like Frisco that cross multiple ISD boundaries within the same city limits.
- If a PID applies, ask whether the assessment is a flat annual charge or a rate tied to home value, since the two behave very differently as the home appreciates.
- Request an escrow estimate from your lender before you compare monthly payments across two communities, not just the sale price.
A Few Quick Answers
Does a MUD tax ever go away? It typically declines as bonds are repaid and more homeowners share the debt load, but it does not disappear until the district's obligations are fully retired, which can take decades in a large community.
Is a PID the same thing as an HOA? No. An HOA is a private association fee for community amenities and enforcement. A PID is a public assessment created by a city or county to fund specific infrastructure like parks or sidewalks, and it shows up on the county tax bill rather than a separate HOA invoice.
Which Collin County areas have the fewest MUDs? Established, largely built-out cities like Plano carry little to no MUD exposure because their infrastructure was already in place before the current wave of growth. The MUD and PID pattern concentrates in the newer growth corridors of Frisco, Prosper, Celina, and parts of McKinney.
The rate on a city's website is a starting point, not the number that determines what you will actually pay. If you are comparing two Collin County communities and want the full tax certificate pulled and explained side by side before you write an offer, The Cole Home Team can walk through it with you. Request a free home valuation and we will help you see the whole bill, not just the headline.
