My wife and I are considering doing some major home
improvements (adding several rooms) to our home located
in San Jose (Santa Clara County), California.  We have
owned our home for more than a decade, and property values
have gone WAY up.  But, because of Proposition 13, our
property tax is much lower than if we just bought the
house.

So here is my question:  If we do the home improvements,
how will that effect our property tax?  I know the tax
will go up, but is it only by the value of the improvements,
or will our entire house be re-appraised up to the full
current market value?

Does it make any difference if the added rooms are in an
attached or detached unit?

Thanks for any info.

       -bob

HI Bob, this site may help explain your situation: 
http://imperialcounty.net/Assessor/valueproperty.htm
Scroll down to New Construction Re-appraisal.?  It seems that the
re-assessment will be based only on the cost of the improvements.  I
would suspect that a detached unit could elicit more interest by the
assessor by suggesting immediately to the money hungry county that the
detached unit had a market value that was higher than the cost of
construction, especially if you had the possibility of splitting your
parcel and eventually selling the detached unit.  The same might apply
if the building permit indicated that the addition to your house was
obviously a new rental unit.  (This is just my speculation.)
A contractor for the expansion might have some ideas about the
relative pricing of work that was new construction and work that was
normal maintenance, and also about how the request for the building
permit could be formulated to avoid a misunderstanding.  (Again my
speculation:  that an addition of a den, bedroom, bath and
jakuzi-sauna room would not look as much like a separate apt as the
same new walls with a kitchen on the plans.)

I would talk to a couple of real estate agents. Their comments are no
legal advice, but they probably know what?s going on, from an owner?s
or buyer?s aspect;  and then talk to a lawyer or tax consultant.

As you should read below, my comment is NOT legal or professional advice.