How much will my property taxes increase when I build an accessory dwelling unit in San Jose?

San Jose homeowners typically see a property tax increase of around one-half to one percent of the total project cost when adding a one-bedroom ADU.

A homeowner in San Jose needed a 700-square-foot detached ADU. New Avenue created a custom design with one bedroom, one bathroom, a loft, a full kitchen, and a laundry area.  The ADU is suitable for use by the family, as a guest house, or as a rental unit to bring in additional income for the homeowners.

Our San Jose ADU clients typically see a property tax increase of one-half to one percent of the total cost of the project when adding an accessory dwelling. For this property, that would mean a jump from $8,791 in taxes to $10,941.

The tax increase for adding this ADU in San Jose breaks down to $179.17 per month.

Does the rental income make up for the property tax increase when adding an accessory dwelling?

Homeowners find that the tax increase is negligible when compared to the rent they can bring in and the increase in property value. In San Jose, an ADU like this one rents for $2,800 to $3,000 per month. That amount is increasing all the time.

The main home is not reassessed when an ADU or addition is added.

New Avenue creates custom ADUs  that are ideal for short-term rentals, long-term rentals, or use by the homeowners.  The total cost of a project like this is $430,000. That 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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