What Is the Mills Act in California? What does It Mean for San Diego Homeowners?
- 3 days ago
- 3 min read
What is the Mills Act in California?The Mills Act is a historic-preservation program that allows participating local governments to enter into contracts with owners of qualified historic properties. In exchange for preserving and maintaining the property, owners may receive a significant reduction in property taxes.
How Does the Mills Act Work?
California established the Mills Act in 1972 as an incentive to preserve historically significant properties.
It is not an automatic tax break simply because a home is old or has architectural character. A property must meet applicable historic requirements, and the local city or county must participate in the program.
In the City of San Diego, a property must be locally historically designated before the owner can apply for a Mills Act agreement.
The agreement is essentially an exchange: the property owner commits to maintaining and preserving the historic character of the property, and the property may receive preferential property-tax treatment.
How Much Can You Save?
This is one of the first questions homeowners ask.
There is no standard percentage because the calculation depends on the individual property.
According to the City of San Diego, property-tax reductions have historically ranged from approximately 20% to 70%, based on County Assessor valuations under the state formula.
However, not every property will see substantial savings. A longtime owner whose assessed value is already relatively low under Proposition 13, for example, may receive little or no financial benefit.
That's why it's important to evaluate the specific property rather than assume a certain tax reduction.
What Are the Owner's Responsibilities?
The Mills Act comes with responsibilities.
In San Diego, owners generally agree to maintain and preserve the historic property according to established preservation standards. The application also requires a proposed 10-year schedule of maintenance, restoration, and rehabilitation activities.
The initial contract term is 10 years and automatically renews annually, maintaining a rolling 10-year term unless either party takes formal action to stop renewal.
What Happens When You Sell?
This is particularly important for homeowners considering a sale.
A recorded Mills Act agreement stays with the property when it is sold. The new owner inherits both the potential property-tax benefits and the responsibilities of the agreement.
That can be an attractive feature for buyers who appreciate historic architecture and preservation, but it also means the terms of the agreement should be clearly understood during a transaction.
Why It Matters in San Diego
San Diego has many neighborhoods known for older and architecturally distinctive homes, including South Park, North Park, Mission Hills, Kensington, and areas throughout the city with designated historic resources.
For owners of qualifying properties, the Mills Act can help make preserving an important piece of San Diego's architectural history more financially manageable.
Final Thoughts
The Mills Act can provide meaningful benefits, but historic designation, eligibility, tax savings, and preservation requirements are property-specific.
If you own—or are considering buying or selling—a historic San Diego property, understanding whether a Mills Act agreement exists is an important part of your real estate due diligence.
For questions involving taxes, legal obligations, historic designation, or eligibility, consult the appropriate City or County agency and qualified tax or legal professionals.
If you're considering selling a historic home, let's talk about your property, your goals, and how its unique history can be positioned in today's market.
📲 Call or text: 619-228-1687
Andréa Frank, GRI, GUILD, CIPS
REALTOR® | CØMPASS
DRE# 01715151
San Diego, California
📞 619-228-1687
CARE DOES MAKE THE DIFFERENCE™
Comments