How much will my property taxes increase if I build a second-story addition in California?
New Avenue created a beautiful second-story addition for a family in Fremont, California. They plan to use the space—which includes a hobby room, a living room, a wet bar, a bathroom, and a bedroom—for themselves now, but they may choose to rent it out later.
Property tax increases when adding an addition to a home in Fremont
When adding an addition or building an accessory dwelling, your property taxes will go up. In general, we expect an increase of one-half of one percent of the total cost of the project. In this case, the family will see a tax increase of $2,625 per year. The total cost of a project like this is $525,000. That includes everything: design, permitting, engineering, all the red tape, site work, and construction. The main home is not reassessed when an ADU is added.
Adding the space was a smart choice for several reasons:
The space is versatile and can be used for themselves or adjusted to rent out. (Rent on a one-bedroom ADU will easily bring in $2000 per month.)
Adding the new space and paying the tax increase is less expensive than moving to a larger home, and it can be hard to find a comparable home in the area.
The home will continue to appreciate, meaning they will always be better off than when they started.
We’ve learned through experience that most homes need four things: an open kitchen/living area, new primary bedroom suite, whole-house sustainability upgrades, and an ADU. This project tics some of those boxes and paves the way to complete other list items in the future.
What do you want for your home?
We’ve learned from 750+ projects that the best approach is building a two- or three-bedroom space. More space means more flexibility, a lifelong home, and more rental income.
New Avenue provides a complete solution for adding an addition or accessory dwelling to your home. We create custom accessory dwellings, new homes, whole-house transformations, and compounds with a net-zero-energy standard.
The no-regrets solution
We guarantee we can deliver on budget with total reliability because we hire only the best design professionals and contractors. Our proprietary software brings unprecedented transparency and flexibility to the design/build process, giving you complete control of your project from start to finish.
