In California, an Accessory Dwelling Unit (ADU) can increase your property taxes, but not by reassessing the entire value of your property. Instead, a “blended assessment” is conducted, in which the county tax assessor estimates the value of the ADU, likely based on its construction cost, and adds this to the current assessed value of your property. This results in a new assessed property value. The value of the primary home is not reassessed.
For example, if you complete an ADU project that cost $200,000 to build, and your combined city-county property tax rate is 1%, you’d pay an additional $2,000 per year in property taxes going forward. This amount would be added to the property taxes you were already paying on your primary home, but the tax amount on the primary home would not change, because its assessed value would remain the same.
If you have lived in your home for many years and currently pay low property taxes, the construction of an ADU will allow you to maintain your low property taxes going forward.
