Understanding the Difference Between a Municipal Service Tax and a Municipal Service Taxing Unit in Southwest Florida

When you’re buying a home in Southwest Florida, you’ll notice property taxes broken down into different categories. Two that often raise eyebrows are the Municipal Service Tax and the Municipal Service Taxing Unit (MSTU). They sound similar, but they aren’t the same thing—and it’s important to understand the difference.

What is a Municipal Service Tax?

A municipal service tax is a countywide tax that applies to all property owners. It’s built into your property tax bill and funds the essential services that everyone benefits from, such as:

• Law enforcement and the sheriff’s office

• Emergency medical services (EMS)

• Fire protection (in some areas)

• Public libraries

• County parks and recreation facilities

Think of this as the “base level” of services that keep the entire community running smoothly. No matter where you live in the county, you’ll pay this tax because you’re benefiting from these countywide resources.

What is a Municipal Service Taxing Unit (MSTU)?

A Municipal Service Taxing Unit, or MSTU, is a special taxing area created for specific neighborhoods or communities. Only property owners within that boundary pay the tax, and the money goes directly toward improvements or services that benefit just that area.

Some common MSTU projects include:

• Street lighting for safety and visibility

• Drainage improvements or stormwater management

• Sidewalks and pedestrian walkways

• Landscaping and beautification projects

• Neighborhood parks or small community amenities

If your neighborhood has an MSTU, you’ll see it listed separately on your tax bill.

The Key Difference

• Municipal Service Tax = Everyone pays.
  Funds broad, countywide services that benefit all residents.

• MSTU = Only some neighborhoods pay.
  Funds local improvements or services within a defined boundary, so only those homeowners pay for them.

Why Does This Matter When Buying a Home?

When looking at homes in Lee or Collier County, you’ll want to pay attention to whether an MSTU applies. It can add to your annual property taxes, but it also means you’re getting specific improvements in your community that you wouldn’t otherwise have.

✨ Example: Two homes side by side may have slightly different tax bills—one might include an MSTU for street lighting, while the other doesn’t.

Bottom Line

Understanding the difference between the municipal service tax and an MSTU helps you get a clear picture of your total cost of ownership. The municipal service tax covers countywide services everyone needs, while an MSTU is a neighborhood-specific add-on for local improvements.

As your trusted Southwest Florida Realtor®, I’ll always help you review tax details for any property you’re considering so there are no surprises down the road.

Have questions about taxes in your neighborhood or a property you’re interested in? I’m here to help!

Kayla Hunter
Palms & Properties Group • Keller Williams Elite Realty
239-850-7719 |  KaylaHunterRealty@gmail.com
LivingSWFlorida.com