How much do property taxes go up when building an ADU rental cottage in Los Gatos, California?

A homeowner in Los Gatos hired New Avenue to create an accessory dwelling for his backyard. He wanted to rent it out for a time and then, if necessary, move his parents or in-laws in.

The two-bedroom accessory dwelling includes a kitchen, living area, and foyer. Each bedroom has its own half bath adjacent to a shared, accessible shower room.

How much does the property tax increase when adding a two-bedroom accessory dwelling in Los Gatos?

In California, the increase in property taxes is usually equivalent to one-half of one percent of the project cost. This home cost 385,217.71 to design, permit, and build. The property tax increase is 1,926.09 per year. The main home is not reassessed when an ADU is added.

With two-bedroom homes in the area renting for $3300 a month, the owner stands to bring in $39,600 each year. That’s enough to cover the cost of the ADU and the property tax increase while giving the homeowners plenty of additional income every month.

New Avenue helps homeowners get more from their property. We are a turn-key solution including design, permitting, all site work, engineering, and construction. We take care of the red tape and everything else involved in building your custom home, remodel, or accessory dwelling.

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