Increase in property taxes when adding a second home in San Pablo, California
New Avenue is doing a major homebuilding project in San Pablo that will affect the homeowner’s property value and property taxes.
The owner wants to remodel the small, one-bedroom home on his property. Eventually, he will add a larger home and turn the existing house into an accessory dwelling.
The remodel will cost $138,000, and the new home will cost $500,000.
How property taxes increase when adding a home
The existing home will not be reassessed when the new home is assessed. In California, the tax increase when adding a second home to a property is generally equal to one-half of one percent of the total cost of the project.
In this case, the increase in taxes will equal approximately $2,500 per year. That’s $208.33 per month.
That amount is negligible when you consider the rental income the ADU will bring in. While the homeowner is enjoying his new, larger home, he’ll also be earning at least $24,000 per year in rental income. That’s enough to cover the cost of the remodel and the increase in property taxes. The additional income can be put toward the mortgage on the new main home or used for other expenses.
Creating your ideal home
New Avenue creates custom accessory dwellings, new homes, whole-house remodels, and compounds.
Here’s what we’ve learned from over 750 completed projects:
The best approach is building a two- or three-bedroom space. When you think big, you can create a lifelong home that’s perfect for you or for bringing in rental income.
Most existing homes need four things: an open kitchen/living area, new primary bedroom suite, whole-house sustainability upgrades, and an ADU)
Our quotes come from our experience. We draw from over 750 completed projects to give you a realistic budget and timeline—it’s all based on real-world data. Our fixed-price bids include design, permitting, all red-tape, engineering, all site work, and construction. To fulfill our responsibility to you and our world, we design with a net-zero-energy standard.
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