Mills Act Program
Read This First!
The Mills Act is the single most important economic incentive program in California for the restoration and preservation of qualified historic buildings by private property owners. The Mills Act Program is administered and implemented by local governments. Mills Act contracts are between the property owner and the local government granting the tax abatement. The Office of Historic Preservation is not a signatory to Mills Act contracts.
Each local government establishes their own criteria and determines how many contracts they will allow in their jurisdiction. For answers to specific questions such as local eligibility criteria, application procedures, and contract terms, contact the city or county official for your jurisdiction.
Mills Act Questions and Answers
You are Important to the Community
Does your local government participate in the Mills Act Program? If so, the Office of Historic Preservation invites you to join the Mills Act community!
We are updating and expanding our list of local governments with a Mills Act program, and we need your help to ensure that the list is as complete as possible. The Mills Act Contacts List will be available for homeowners and others seeking to determine if their community participates in the Mills Act program and who within their local government is the program contact. Mills Act communities throughout California also will be able to use the list to connect with each other and share insights and best practices about the program.
To add or update your information in the contacts list, please fill out the Mills Act Contact Information Form. Email the completed form to info.calshpo@parks.ca.gov. Include "Mills Act Contact Information" in your Subject line.
Not sure if you are already on the list or if your information is current? Check our current Mills Act Contacts List. The list is updated weekly, as needed.
Mills Act Questions and Answers
Q: What is the Mills Act Program?
A: Economic incentives foster the preservation of residential neighborhoods and the revitalization of downtown commercial districts. The Mills Act is the single most important economic incentive program in California for the restoration and preservation of qualified historic buildings by private property owners. Enacted in 1972, the Mills Act legislation grants participating local governments (cities and counties) the authority to enter into contracts with owners of qualified historic properties who actively participate in the restoration and maintenance of their historic properties while receiving property tax relief. California State Codes Relating to the Mills Act include the following:
California Revenue and Taxation Code, Article 1.9, Sections 439 – 439.4
Q: My property or a property I am considering buying is already under a Mills Act contract. What does that mean to me as a property owner?
A: Mills Act contracts are for 10 years initially with automatic yearly extensions and stay with the property when transferred. Subsequent owners are bound by the contract and have the same rights and obligations as the original owner who entered into the contract. Because the local government and the property owner negotiate other specific terms of the contract, you need to contact your local government to determine the rights and obligations a Mills Act contract creates.
Q: How are tax assessments determined for properties under the Mills Act?
A: The State Board of Equalization has provided guidelines for county assessors for use in assessing properties under the Mills Act.
Q: Does my property qualify for the Mills Act Program?
A: First, find out if your local government participates in the program. Use the Mills Act Contacts list to find out if your local government participates in the Mills Act Program, what the local criteria are, and what the process is for applying.
Q: No, my local government does not currently participate. Now what do I do?
A: Contact the Planning Department or Community Development Department of your local government and ask them to consider adopting the Mills Act Program.
Q: How does the Mills Act benefit Local Governments?
A: The Mills Act allows local governments to design preservation programs to accommodate specific community needs and priorities for rehabilitating entire neighborhoods, encouraging seismic safety programs, contributing to affordable housing, promoting heritage tourism, or fostering pride of ownership. Local governments have adopted the Mills Act because they recognize the economic benefits of conserving resources and reinvestment as well as the important role historic preservation can play in revitalizing older areas, creating cultural tourism, building civic pride, and retaining the sense of place and continuity with the community’s past.
A formal agreement, generally known as a Mills Act or Historical Property Contract, is executed between the local government and the property owner for a minimum ten-year term. Contracts are automatically renewed each year and are transferred to new owners when the property is sold. Property owners agree to restore, maintain, and protect the property in accordance with specific historic preservation standards and conditions identified in the contract. Periodic inspections by city or county officials ensure proper maintenance of the property. Local authorities may impose penalties for breach of contract or failure to protect the historic property. The contract is binding to all owners during the contract period.
Q: How does the Mills Act benefit Owners of Historical Properties?
A: Owners of historic buildings may qualify for property tax relief if they pledge to rehabilitate and maintain the historical and architectural character of their properties for at least a ten-year period. The Mills Act program is especially beneficial for recent buyers of historic properties and for current owners of historic buildings who have made major improvements to their properties.
Mills Act participants may realize substantial property tax savings each year for their properties because valuations of properties under a Mills Act contract are determined by the Income Approach to Value rather than by the standard Market Approach to Value. The income approach, divided by a capitalization rate, determines the assessed value of the property. In general, the income of a residential property is based on comparable rents for similar properties in the area, while the income amount on a commercial property is based on actual rent received. Because rental values vary from area to area, actual property savings vary around the state. It is important to note that because County Assessors are required to assess all properties annually, Mills Act properties may see slight fluctuation in property taxes each year.
Q: What is a Qualified Historical Property?
A: A qualified historical property, as defined in the state statute:
“Qualified historical property” for purposes of this article, means privately owned property which is not exempt from property taxation and which meets either of the following:
(a) Listed in the National Register of Historic Places or located in a registered historic district, as defined in Section 1.191-2(b) of Title 26 of the Code of Federal Regulations.
(b) Listed in any state, city, county, or city and county official register of historical or archtecturally significant sites, places, or landmarks.
(Added by Stats. 1985, Ch. 965, Sec. 2.)
Q: What is OHP’s role in the Mills Act program?
A: OHP provides Mills Act information to local governments and uses information provided by local governments to maintain a list of communities participating in the Mills Act program as well as copies of Mills Act ordinances, resolutions, and contracts that have been adopted. OHP does not participate in the contract negotiations, is not a signatory to the contract and has no authority over the administration of the Mills Act program.
Q: Where can I get more information?
A: Contact your local government for answers to specific qestions about the program in your community. Additional information is available from the Board of Equalization and California Government Code, Article 12, Sections 50280 - 50290.