Home improvements can be a great way to increase comfort and value — but in Santa Clara County, certain types of work can also impact your property tax assessment.

Understanding what may trigger a reassessment (and what typically won’t) can help homeowners make smarter renovation decisions and avoid unexpected tax increases.

How Property Taxes Work in California

Under Proposition 13, your property tax is generally based on your original purchase price and can only increase by up to 2% per year, unless there is:
• A change in ownership
• Or new construction

It’s the “new construction” part that surprises many homeowners.

When you make certain improvements, the County Assessor may reassess only the value of the new work, not your entire home — but that can still raise your annual tax bill.

Adding Square Footage Often Triggers Reassessment

One of the most common triggers for reassessment is adding square footage.

Examples include:
• Room additions
• Expanding a kitchen or living room footprint
• Building a new primary suite
• Converting a garage into living space
• Adding a second story

In these cases, the Assessor typically reassesses the new portion of the home at current market value and adds it to your existing assessed value.

This means:
Your original home keeps its Prop 13 tax base,
but the new square footage is taxed at today’s value.

Other Improvements That May Trigger Reassessment

Beyond adding square footage, other projects can also lead to reassessment:

1. Building an ADU or Second Unit

Accessory Dwelling Units are usually considered new construction and may result in a partial reassessment.

2. Adding a Pool

Pools are considered a permanent improvement and can be reassessed.

3. Major Structural Changes

Examples:
• Raising the roof
• Rebuilding a significant portion of the structure
• Changing the foundation
• Reconfiguring load-bearing walls

4. Rebuilding After Major Damage

If more than a certain percentage of the structure is rebuilt (often around 50%), it may be treated as new construction for tax purposes.

What Typically Does Not Trigger Reassessment

Not all improvements cause reassessment. Many common updates are considered maintenance or like-for-like replacements.

These usually do NOT trigger reassessment:
• Replacing a roof
• New windows
• New flooring
• Kitchen or bathroom remodels (without expanding square footage)
• Replacing plumbing or electrical
• New HVAC
• New paint or exterior siding

These are considered repairs or modernization, not “new construction.”

Why Permits Matter

Most reassessments are triggered when:
• A building permit is pulled
• The work is finalized and recorded

The County Assessor receives notice of permitted work and may review it to determine if it qualifies as assessable new construction.

This is why homeowners sometimes see a reassessment months after finishing a project.

How Much Will My Taxes Go Up?

It depends on:
• The value of the improvement
• Current market conditions
• The scope of the work

For example:
If an addition is valued at $300,000, that portion could be added to your assessed value and taxed accordingly — while your original home remains protected under Prop 13.

Planning Ahead Is Key

Before starting a major renovation, especially one that adds square footage or creates a new unit, it’s wise to consider:
• The potential tax impact
• How long you plan to stay in the home
• Whether the added value outweighs the long-term tax increase

For some homeowners, the lifestyle benefit is worth it. For others, it may change how they approach a remodel.

The Bottom Line

In Santa Clara County:
✔ Adding square footage can trigger reassessment
✔ ADUs and pools can trigger reassessment
✔ Structural rebuilds can trigger reassessment
✔ Cosmetic and like-for-like upgrades usually do not

Reassessment doesn’t mean you shouldn’t improve your home — it just means the decision should be made with full awareness of the financial implications.

Thinking About Remodeling or Selling?

If you’re considering major improvements and want to understand how they could impact your property taxes or resale value, we're happy to talk it through with you.

A quick conversation now can help you avoid surprises later.