Rent the Backyard (YC S19) wants to build a studio apartment in your yard

Re:Rent the Backyard (YC S19) wants to build a studio apartm... by opportune on Thursday July 18, 2019 @07:32PM (#20475003)

>increases in property taxes

Not an issue in the bay area

>the taxable revenue from the rental and its impact on personal taxes

Progressive income taxation should make this moot. Also many expenses are likely tax-deductible. Combined with FHA terms, mortgage interest deduction, etc. and this is actually rather tax-advantaged over regular rentals

[ Parent | on HN ]

Re:Rent the Backyard (YC S19) wants to build a studio apartm... by refurb on Friday July 19, 2019 @12:55AM (#20476274)

Not an issue in the bay area

Why not?

Prop 13 protects the homeowners from higher taxes if the property appreciates, but as far as I know that doesn’t cover renovations.

Otherwise you could buy a beat up $1M, year it down and still pay the same taxes.

[ Parent | on HN ]

Re:Rent the Backyard (YC S19) wants to build a studio apartm... by sburl on Friday July 19, 2019 @02:41AM (#20476614)

The way this works with ADUs is a blended approach. The existing home's tax status is protected by Prop 13 and the ADU as a structure is appraised. While adding an ADU adds considerable resale value to a home, tax assessors don't typically value them that highly. It's also worth noting the ADU also becomes protected under Prop 13 after the initial assessment (https://maxablespace.com/granny-flat-tax-implications/)

[ Parent | on HN ]