Property tax increase when converting a shed into an accessory dwelling in Berkeley
In one of our favorite projects, New Avenue designed a beautiful ADU as a guest house and rental house. The new accessory dwelling, which takes the place of an unused shed, has a full bathroom, a kitchen, a living space, and room for a bed.
Although we find that larger ADUs are a better source of income and are the best way to maximize a property’s potential, a smaller unit like this can be a good solution if there’s not much space available. A one-bedroom ADU will bring in around $2,000 per month, while a two-bedroom ADU will bring in $3,000 and a three-bedroom ADU will get $4,500. More space means more flexibility, a lifelong home, and more rental income.
How much do property taxes increase when you build an accessory dwelling in Berkeley?
New ADU owners can expect an increase in property taxes that’s equal to one-half of one percent of the total cost of the project. An ADU like the one we built in Berkeley will cost around $250,000. That generally results in a property tax increase of $1,250. The main home is not reassessed when an ADU is added.
This particular property saw a tax increase of just under $1,000 after adding the accessory dwelling unit. That breaks down to just $83.33 per month.
When you consider the $2,000 in rent the homeowner is getting every month, the slight tax increase is no problem.
How to get your ADU (as painlessly as possible)
We find that most existing homes need four things:
1) An open kitchen/living area
2) A new primary bedroom suite
3) Whole-house sustainability upgrades
4) An ADU
New Avenue takes care of everything for you when you add 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. Our projects include design, engineering, permitting, all the red tape, all the site work, and construction.
We guarantee we can deliver on budget with total reliability. Our proprietary app brings transparency and flexibility to the design/build process. We have the only transparent pricing in the industry. With over 750 projects in the books, we’ve perfected the process.
Contact us today to schedule your free Q & A call or fill out our online form to get in touch. We’ll answer all your questions and, when you’re ready, we’ll introduce the design/build team that’s perfect for your project.
