How much will my property tax increase when I build an accessory dwelling in Berkeley?

Property tax increase when adding a two-bedroom ADU in Berkeley

New Avenue recently created a two-story accessory dwelling unit for a couple in Berkeley. They needed a place to live during remodels on their main home, and they wanted a guest house that could be used for their adult children or as a rental unit.

This project includes a garage, a living room, a kitchen, 2 bedrooms, 1.5 bathrooms, laundry facilities, and a deck.

Before the addition of the ADU, this property was assessed at approximately $300,000 with an annual tax payment of around $5,200. The total cost of the project was $697,712.68.

With any addition, property taxes do increase. In Berkeley, we usually see an increase equal to one-half of one percent of the total project cost. That means a project similar to this one would result in an increase in property taxes of $3,488.56 per year.

Adding an ADU would increase their tax bill by $290.71 per month. That’s almost nothing when compared to the $2200 to $2500 they could bring in in rent every month and the appreciation value of the property. (It’s important to note that the main home is not reassessed when an ADU is added.)

With over 750 completed projects, we’ve learned that most homes need four things: an open living room/kitchen, whole-house sustainability upgrades, a new master suite, and an accessory dwelling unit. With these updates, even century-old homes can support their owners’ interests and needs.

New Avenue provides a turnkey solution for anyone who wants to improve their lives with a custom accessory dwelling. Our design/build service for custom homes, additions, and ADUs includes custom design, engineering, permits, red tape, all site work, and construction. We guarantee we can deliver on budget with total transparency and a professional standard you can trust.

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