How much do property taxes go up when building an ADU rental cottage in San Jose?
New Avenue designed an accessible one-bedroom accessory dwelling for a home in San Jose. The homeowner wanted a place for her parents and her son to stay in as needed.
As with any ADU project, the property taxes will increase once the ADU is complete. While the main home is not reassessed, the ADU value is added to the property value.
The property taxes were $14,456. In San Jose, we typically see an increase in property taxes equal to one-half of one percent of the total project cost when adding a detached accessory dwelling. For this property, that means an additional $1,750 per year in property taxes.
The monthly property tax increase on this property in San Jose is $145.83 per month after adding an ADU.
That increase is easily paid for by the ADU. If they’re renting out the unit, they can bring in $2400 per month. If they’re using it for family, they’re saving at least $2400 per month in housing costs. In either case, the value added to the property far outweighs the investment.
New Avenue is a turnkey solution for accessory dwellings, additions, remodels, and custom homes. A project like this ADU in San Jose costs $350,000. That includes custom design, permitting, engineering, red tape, all site work, and construction. We guarantee we can deliver on budget with total transparency and a professional standard you can trust.
Schedule your free call today. A licensed professional will answer all your questions and help you get started on your ADU project.
