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So the thought of buying a historically designated (or potentially designated) home has crossed your mind.  Owning a piece of San Diego history sounds like an amazing idea....and it is.  To help with the cost of the maintenance of these cherished homes, you can apply for Mills Act designation.  

 

Let's explore the history behind and specifications related to the Mills Act:

 

What is Mills Act?

  • The Mills Act is named after former Senator James Mills, a San Diegan, who thought it important to offer monetary incentives to ensure the care and preservation of California's historic homes.

What properties in San Diego can apply for Mills Act designation?

  • Properties located in the City of San Diego, City of La Mesa, City of Coronado, City of Escondido, City of Chula Vista, City of National City and the County of San Diego are eligible to apply.  
  • Properties must have received historical designation from the City the property is located in.  Obtaining historical designation requires a property to be either architecturally significant, be associated with a historically significant person, event or located in a historic district.

How do I obtain a Mills Act designation?

  • Once your property receives a historical designation, you can apply for the historical property contract that values the property based on rental income rather than comparable resale values.  The cost of the application and implementation of the agreement is in excess of $2,000, depending on location.  The contract lasts for 10 years and is typically auto-renewed unless the owner wishes to cancel the contract.

What happens once I have Mills Act designation?

  • This will generally result in a lower property tax assessment.  Most owners can expect a 20%-70% reduction in the annual taxes.  This can be transferred to a new owner should you sell the property.
  • Homes must be maintained as historical sites.
  • Property is subject to rules and regulations of the Office Historic Preservation of the Department of Parks and Recreation, the Historic Business Code and U.S. Secretary of the Interior's Standards for Rehabilitation.

There are only about 370 homes with Mills Act designation in San Diego County.  Be certain to do your homework before buying a potentially historic home as the process to try to get the designation can be lengthy and expensive.