Valuation Property Tax rule, San Jose

We have a home 1580 sqft living area+garage. Actually, we plan to add either 1000 sqft or 1200 sqft. The lot size is 10k and it is possible to expand easily to 1200 sqft. The present house has 3 bed and 1 bath. We are planning to add 2 bed room and 2 bathrooms.

My friend was telling me that if we add more than 50% of sqft ( 790 sqft ), valuation for property tax may change.

The addition may cost 350k to 400k, which will end up actually $1.3M, but entire revaluation may result to $2M level. This is not for flip, but for us to move in as primary home.

Do we have any restrictions like this?

I don’t have any prior experience with that, but this is one of the area I was planning to do research :slight_smile:

1 Like

I don’t have an answer. I asked many people about this. And never got a straight answer.

The best I can understand is that the existing area is not reassess. All additions will be assessed at current rate.

10 years ago, I always hear this. People demo their house down to a single wall, then rebuild. The claim is that this is remodel and property tax is not re-assessed. But I know several people who did tear down and rebuild; they said there is no such loop hole.

1 Like

I’ve seen the one wall thing in SJ too. I’m not sure the strategy worked. it’s pretty common in West SJ near country lane elementary.

1 Like

Some information from CA Gov site:

They even have section about leaving one wall up vs tearing down everything:


Also info from Santa Clara Country

Here is Larry Stone (tax assessor of Santa Clara country) talking about this based on his own experience on remodelling & extension of his own home:

Good links. Thank you

So at work today, conversation came up about rebuilding. A coworker just rebuild in West SJ couple years ago. She said leaving the wall up will not make a difference to assessment. However, there are PG&E and Water Dept fees. So if new construction (tear down and rebuild), you have to pay these fees that can be up to $12k. If you leave a wall up, there is no fee. This is even if they don’t do anything, since the previous house already has the connections.

The link from myo mentioned leaving a wall up can affect the assessment of the land. That is kind of interesting.

1 Like

Wait, I thought I read understanding saying leaving a wall up doesn’t have effect on the assessment? I thought they gonna reassessed all the square footage affected by extension or rebuild. But not to the area where you just do remodel (replacing old things with new things - like new cabinets and fixtures)

In this link, the last sentence of 1st paragraph says: “Only the assessed value of the land would not change.” What does that mean? At first I thought I understood it. I thought it meant that if wall is left up, then assessed value of the land would not change. Then after reading it again, I am confused :confounded:

I believe since you didn’t acquire the land just for reconstruction, it will not be assessed again, but all the building part will be reassessed since you just rebuilt it (regardless of leaving a wall or not). But if you just acquire the property, then assessed land value is based on the price you just paid, so doesn’t really matter. It affects more if your land value is protected under prop 13. At least that’s my understanding.

It says: “To leave one wall standing would make no difference for property tax purposes–essentially, the improvements would be considered all new construction.”