AB 1033: What California’s New ADU Law Means for Homeowners

What Is an ADU?

An Accessory Dwelling Unit (ADU)—sometimes called a granny flat or in-law suite—is a small, independent living space built on the same property as a primary home. It may be attached or detached and includes independent living facilities such as a kitchen, bathroom, and sleeping area.

What Is AB 1033?

California Assembly Bill 1033, passed in 2023, removes a major barrier for homeowners: it allows ADUs to be sold separately from the main residence. Previously, ADUs could only be sold under very restrictive conditions, such as when developed by a nonprofit or sold with lengthy deed restrictions.

With AB 1033, local governments can now opt in to permit the separate sale of ADUs as condominiums—subject to their own ordinance and requirements.

Why This Matters

• For Homeowners: You can now unlock the equity in an ADU separately—creating a flexible income source or offering part of your property for sale.

• For Buyers: ADUs may become an affordable path to homeownership, offering options beyond traditional single-family homes.

• For Communities: Expands housing supply and helps address California’s housing shortage with creative, smaller-scale ownership opportunities.

Even better, when an ADU is sold separately, only the ADU is reassessed for property taxes—your primary home keeps its existing base tax rate.

Final Thought

AB 1033 isn’t automatically transformative—it only takes effect in areas where local jurisdictions choose to adopt it. But it opens exciting new possibilities for homeowners, buyers, and the broader California housing market.