How much does property tax increase when you convert a shed into a two-bedroom accessory dwelling in Berkeley?
In one of our Berkeley ADU projects, we converted an old shed into a beautiful two-bedroom home. The homeowner wanted a backyard cottage that could be used as a guest house or a rental house. She also wanted to add a master bathroom to the existing home.
A two-bedroom or three-bedroom ADU and a master bathroom are two of the best ways you can convert an existing house into a lifetime home. In completing over 750 projects, we’ve learned that most homes need four things: a master suite, an open kitchen/living area, whole-house sustainability upgrades, and an accessory dwelling unit.
Here’s what happens to your property tax when adding an accessory dwelling in Berkeley.
Property tax in this area tends to increase by one-half of one percent of the total cost of the project. When you add an accessory dwelling, your existing home is not reassessed. An ADU like this one will cost around $500,000, resulting in a tax increase of $2,500 per year. That’s $208.33 per month.
Compare that to the potential rental income for the ADU. A two-bedroom accessory dwelling in this area can bring in $3,000 every month, and a three-bedroom ADU can bring in $4,500 per month.
If the homeowner chooses to use the ADU for family, they’ll save $3,000 or more in housing costs, leaving a significant amount of money in their pockets.
Making your home match your lifestyle
At New Avenue, we create ADUs, remodels, additions, custom homes, and compounds that fit and support our clients’ lives. We provide a turnkey solution that includes design, permitting, red tape, engineering, site work, and construction with minimal hassle for the homeowner.
We work with only the best design professionals and contractors to deliver on-budget and with a professional standard you can rely on. Drawing from our database of real projects like yours, we provide accurate quotes and timelines with total transparency.
Contact us to discuss your project. We’ll listen to your needs, answer your questions, and help you get started on your home transformation.
