A historical designation can provide a property tax reduction. San Diego is a relatively young town, but many residents are beginning to take notice of one of our most valuable resources, our historic sites and houses. The Mills Act, named for San Diegan James Mills, a former State Senator, provides an important monetary incentive designed to encourage the preservation, maintenance, and restoration of designated historic properties. If you have questions on the calculation of the assessed value, please call the Assessor's Office at (619) 236-3771.

What is the Mills Act?
The Mills Act provides for potential property tax savings on a property that is subject to a historical property contract. Mills Act properties are to be valued using the rental income and expense that could be expected from that property rather than using comparable sales to establish the assessed value. This generally results in a much lower assessment especially when the property has been recently purchased.

How does my property qualify for the Mills Act?
I t m u s t m e e t qualifying criteria such as significant architecture, association with a historically significant event or person, or location in a historic district (such as Marston Hills.) Once designated as a historical site, the owner can then apply for a voluntary contract with that city. The application and approval process is accomplished entirely through the city (or County for unincorporated areas) where the property is located. The Assessor s office only administers the property tax portion of the Mills Act.

How long is the contract and is it canceled if I sell the property?
The term of the contract is a self renewing, ten year agreement, however, either the property owner or the city can file for non-renewal. As the contract follows the property and not the owner, the contract will transfer uninterrupted on the sale of the property.

Is the property owner required to open the property to the public?
No, the law was revised in 1985 when new legislation relaxed the rules to encourage the preservation of historic properties. Prior to that time, any property under contract had to be open to the public for tours.

Do all historical properties in San Diego County qualify for the Mills Act?
No, only the cities of San Diego, Chula Vista, Coronado, Escondido, La Mesa, Encinitas, San Marcos, and National City have enacted ordinances to grant a Mills Act agreements. The County of San Diego has also passed an ordinance for historical properties in the unincorporated areas of the County.

How many properties are benefiting under the Mills Act in San Diego County?
Currently, there are approximately 1200 properties under contract with the various cities that receive this property tax benefit.

What is the Assessor's role in the process?
The Assessor's Office must determine the assessed value based on a formula under State law, using an income and expense stream that could be generated from the property.

What kind of savings can I expect on my property tax bill?
Typically, property owners can expect a 20% to 70% savings on their property taxes. Under State law, the lesser of 1) the current market value, 2) the Proposition 13 value, or 3) the restricted Mills Act value will be used to calculate your property taxes. It is possible that the Proposition 13 value may be lower than the restricted value, and the property would receive no property tax benefit.

Since I have owned my property for many years and already have a very low assessment, is it worthwhile to apply for the Mills Act?
Some owners who would receive no property tax benefit still apply for the Mills Act. It can be a selling point to a potential buyer because the property would not be reappraised at its full market value upon sale if it were already under a Mills Act contract.

Once my property is listed on a historic register, are there any binding restrictions that will affect my property?
Yes, once that property is designated on a Federal, State, or local register, it is subject to the rules and regulations of the Office of Historic Preservation of the Department of Parks and Recreation, the U.S. Secretary of the Interior's Standards for Rehabilitation, and the Historic Building Code. In effect, the owner must protect, maintain, and rehabilitate the property into perpetuity.

Mills Act Benefits

• Possible reduction in property taxes - average of 20% to 70%
• No supplemental bills if under contract at the time of transfer or completion of new construction
• Transferable if property is sold

Mills Act Restrictions

• 10-year contract, which is renewable
• Once a property is designated as a Historical Property, it must be permanently maintained as a historical site

Who should I contact if I want to place my property under the Mills Act?
Each city has its own ordinance and criteria to determine if a particular property qualifies. Contact the following departments for further information:

• San Diego - Historical Resources Board, (619) 235-5224
• Chula Vista - Planning Dept., (619) 409-5465 or (619) 585-5621
• Coronado - Community Development Dept., Community Development, (760) 633-2680
• Escondido - Planning Dept., (760) 839-4553
• La Mesa - Community Development Dept., (619) 667-1177
• National City - Planning Dept., (619) 336-4310
• County of San Diego - Dept. of Planning and Land Use Historical Properties, (858) 694-2981 or (858) 694-3656
• San Marcos - Planning, (760) 744-1050

Courtesy of San Diego Assessor/Recorder/County Clerk, (619) 236-3771
[edited from print version]