Prop 13 and reassessment when you remodel

Prop 13 keeps your assessed value close to what you paid, plus at most 2% a year. Two things change it: a change in ownership and new construction. Most repairs do not.

What triggers reassessment

• A sale or other change in ownership. The county reassesses the whole property at market value.
• New construction that adds square footage, a new building, or a new unit such as an ADU.
• A change in use, or a remodel that makes part of the home substantially like new. A full gut remodel can count.

Only the new part is reassessed

When you add a room or build an ADU, the assessor adds the market value of the new work to your current assessed value. The rest of the home keeps its Prop 13 base.

Example: a home assessed at $900,000 adds an ADU the assessor values at $350,000. The new assessed value is about $1,250,000. At a 1.2% total tax rate, the bill goes up about $4,200 a year.

What is not reassessed

• Normal repair and maintenance, such as a new roof, paint, or a new water heater.
• Seismic retrofits. Most are excluded until the next change in ownership. Unreinforced masonry upgrades are excluded for 15 years.
• Improvements that make a home accessible for a person with a disability. File Form BOE-63-A with the county assessor.
• Active solar energy systems finished before January 1, 2027. The exclusion lasts until the next change in ownership.
• Rebuilding a home damaged in a disaster, if the new home is comparable in size and use.

The 2% cap and a drop in value

Your assessed value goes up no more than 2% a year. If the market value falls below your assessed value, you can ask the county assessor for a decline-in-value review (Prop 8). The value can climb back to the Prop 13 limit when the market recovers.

Before you remodel

• Ask the county assessor how a planned project will be valued. Both the Santa Clara and San Mateo County assessors answer questions by phone and email.
• Keep permits, plans, and invoices. Assessors find new construction through building permits.
• Plan for the higher tax bill in your budget, especially for an ADU you will rent.

Read how property tax works when you buy

Sources: California State Board of Equalization: New construction, California State Board of Equalization: Property tax overview, Santa Clara County Assessor, San Mateo County Assessor.

General information as of October 21, 2026, not legal or tax advice. Rules change and local ordinances differ. Confirm the details for your property with the agency named above, an attorney, or a tax advisor.