How will my property taxes change when I add an ADU or JADU?

New construction to the existing home, including ADU, JADU and patios, pools etc. is assessed at market value upon completion. However, the existing land and structures not involved in new construction will not be included in the reassessment. The increment of value determined for the newly constructed property (ADU or JADU), will be added to the existing assessed improvement value. The new assessed value of the total land and improvements will establish a new base year value. Prop 13 limits annual increases to the base year value of real property to no more than 2 percent and limits the property tax rate to 1 percent, plus the rate necessary to fund local voter-approved bonded indebtedness, and Prop 13 limited future property tax increases.

Each property will require a one-on-one analysis to determine the added value of an ADU, so contact the El Dorado County Assessor’s Office once you have an idea of your plan. They will be able to provide you with a rough estimate of tax implications.

Adding an ADU may impact your income taxes as well. This can be rather complicated, and it’s best to discuss these with a tax advisor.