Does an ADU raise my property taxes? Only the new part is assessed

Will building an ADU raise my property taxes?

Yes, by the value of the new construction and nothing more. California treats any addition to real property, and any alteration that converts a building to a different use, as new construction ³, and the assessor must put a value on it ².

The part that surprises people is what does not change. The base year value of the rest of the property, the part that did not undergo new construction, shall not be changed ². Under Prop 13, that base is what keeps an old purchase price on your tax bill, and an ADU does not reset it. The Board of Equalization, which oversees county assessors, puts it the same way: the new base year value is set only for the newly constructed portion ¹.

Does the assessor reassess my whole house and land?

No. The house and the land keep their existing base year values, and only the ADU gets a new one ². When the assessor sends you a notice, the law requires it to show the new base year value of the completed new construction that shall be added to the existing taxable value of the remainder of the property ⁹.

The land does not get revalued just because it can now hold a second home. The state's handbook for assessors says increases in land value caused by appreciation or a zoning change rather than new construction will not be enrolled ⁵. If your neighborhood has doubled in value since you bought, that gain stays off your bill until the property changes hands.

How does the assessor figure the value of a new backyard house?

The assessor values it at market value on the day it is finished. For new construction, full cash value means fair market value on the date the new construction is completed ⁴. That number is the ADU's base year value from then on ².

Market value is not the same thing as what you paid. The handbook says only the value, which is not necessarily the same as the cost, of the alteration should be added ⁵. Its own example is a swimming pool that cost $35,000 to build but added only $20,000 to the home's market value; the pool is assessed at $20,000 ⁶. The same logic can cut the other way if a finished unit is worth more than it cost.

How the assessor gets to market value depends on the data. The handbook prefers comparable sales when there is enough market information, but says new construction often limits that data, and then the cost approach may be preferred ⁷. In practice that means the assessor may look at what similar homes with and without a backyard unit sell for, at what it would cost to build, or at both. The valuation printed on your LADBS permit is a separate figure; our Reseda cost guide shows how far permit valuations can sit below real build prices.

What about a garage conversion or a JADU inside the house?

A conversion is assessed too, but only for the value the work adds. The definition of new construction includes an alteration that converts the property to a different use ³, and the assessors' handbook lists conversion of a residential garage to living area as an assessable alteration ⁸.

The handbook works one through with numbers ⁸. An owner converts a 500 sq ft garage on a house with a 1979 base year value. Homes with converted garages were selling for about $20,000 more than homes without them, so $20,000 is the value of the new construction. The assessor took the old base, raised it by the allowed inflation factor to $87,742, and added the $20,000, for an enrolled value of $107,742 ⁸. The 1979 base stayed in place; only the $20,000 was new.

A junior ADU carved out of an existing bedroom follows the same rule, because it is an alteration inside existing space. If you are planning a conversion, check the garage's own permit history first; our garage conversion permit guide walks through it, and JADU vs ADU covers which one fits your house.

When will the new tax bill show up, and why did I get two?

The bill follows the permit. Every city that issues a building permit must send a copy to the county assessor as soon as possible, and must send the certificate of occupancy or other proof of completion within 30 days ¹⁰. The handbook says a presumption of completion may be attached to a building permit final approval or notice of occupancy ⁷, so in practice the clock usually starts when LADBS signs off.

Los Angeles County reassesses as of the first day of the month after the new construction is completed, and bills the difference on a supplemental bill that is separate from your regular annual bill ¹¹. If the ADU is finished between January 1 and May 31, you get two supplemental bills: one for the rest of that fiscal year and one for the next ¹¹. That is normal, not a mistake. After that, the ADU's value is simply part of your regular annual bill.

How much will my yearly property tax go up?

Roughly 1% of the value the assessor puts on the ADU, plus your area's voter-approved charges. On the LA County bill, the general tax levy is the 1% rate applied to every property, and voted indebtedness is a separate line for voter-approved taxes ¹².

Here is the arithmetic with a round number. If the assessor enrolls your finished backyard house at $200,000, the 1% general levy on it is $2,000 a year, and the voter-approved charges add more on top. Your actual figure depends on the value the assessor sets, which you cannot know in advance.

After the first year, the ADU's value grows like the rest of a Prop 13 property. The yearly inflation increase can never exceed 2 percent of the prior year's value ¹³. Property tax is one of several costs that come after the build; our guide to ADU soft costs in Los Angeles covers the ones you pay before it.

Is there a property tax break for ADUs, and can I appeal the value?

There is no ADU exemption in California law as of October 2026. A 2024 bill, SB 1164, would have excluded newly built ADUs from new construction for a period of years ¹⁴, but its first hearing was canceled at the author's request and the bill failed ¹⁴. The general rule in the sections above still applies.

You can appeal the value. The assessor's notice must tell you the value it set and your right to appeal, and in Los Angeles County an appeal of a supplemental assessment generally must be filed within 60 days of the mailing date printed on the tax bill ⁹. If you think the number is high, the strongest evidence is the same kind the assessor uses: sales of similar homes with and without a backyard unit, and your real construction cost.

Quick answers

Sources

1. Survey Topic: New Construction, California State Board of Equalization. Facts checked 2026-10-09
2. Revenue and Taxation Code section 71 (statute text, mirror of leginfo.legislature.ca.gov), California Legislature, via california.public.law. Facts checked 2026-10-09
3. Revenue and Taxation Code section 70 (statute text, mirror of leginfo.legislature.ca.gov), California Legislature, via california.public.law. Facts checked 2026-10-09
4. Revenue and Taxation Code section 110.1 (statute text, mirror of leginfo.legislature.ca.gov), California Legislature, via california.public.law. Facts checked 2026-10-09
5. Assessors' Handbook Section 410, Assessment of Newly Constructed Property, California State Board of Equalization. Facts checked 2026-10-09
6. Assessors' Handbook Section 410, Example 3-2, California State Board of Equalization. Facts checked 2026-10-09
7. Assessors' Handbook Section 410, valuation approaches and date of completion, California State Board of Equalization. Facts checked 2026-10-09
8. Assessors' Handbook Section 410, Example 2-2 (garage conversion), California State Board of Equalization. Facts checked 2026-10-09
9. Revenue and Taxation Code section 75.31 (statute text, mirror of leginfo.legislature.ca.gov), California Legislature, via california.public.law. Facts checked 2026-10-09
10. Revenue and Taxation Code section 72 (statute text, mirror of leginfo.legislature.ca.gov), California Legislature, via california.public.law. Facts checked 2026-10-09
11. Supplemental Secured Property Tax Bill, Los Angeles County Property Tax Portal. Facts checked 2026-10-09
12. Supplemental Secured Property Tax Bill: General Tax Levy and Voted Indebtedness, Los Angeles County Property Tax Portal. Facts checked 2026-10-09
13. Revenue and Taxation Code section 51 (statute text, mirror of leginfo.legislature.ca.gov), California Legislature, via california.public.law. Facts checked 2026-10-09
14. SB 1164: Property taxation: new construction exclusion: accessory dwelling units (bill status), CalMatters Digital Democracy. Facts checked 2026-10-09
15. Revenue and Taxation Code section 75.10 (statute text, mirror of leginfo.legislature.ca.gov), California Legislature, via california.public.law. Facts checked 2026-10-09

Greenlight is not a contractor, architect or engineer, and this is not legal advice. Rules change; every fact here shows the date we last checked it.