What is the increase in property taxes when building an accessory dwelling unit in Oakland, CA?
New Avenue designed a detached rental unit for a couple in Oakland. They wanted to use the space in their backyard to make housing available to a family or some students who needed it. They also saw a great opportunity to bring in additional income. The two-story ADU has three bedrooms, two bathrooms, a kitchen, a living area, and a dining area.
Do taxes increase when you add an ADU?
As with any accessory dwelling project, the property taxes will go up once construction is complete. In California, we generally see an increase equal to one-half of one percent of the total cost of the project.
This project cost $492,928 and has a projected annual property tax increase of $2,464.64. The main home is not reassessed when an ADU is added.
Considering that the ADU will bring in $54,000 per year in rent, the slight increase in property tax is unimportant. The ADU will pay for itself, the tax increase, and some of the homeowners’ other needs such as education, retirement, travel, or the mortgage on their main home.
New Avenue is a full-service design/build firm. The cost above includes custom design, permitting, engineering, all site work, and construction. We take care of it all—on budget and with total transparency.
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