The Mills Act

The Mills Act allows owners of qualifying historic structures to receive up to 60% property tax relief. In exchange, the owner agrees to preserve, maintain, and if needed, restore their structure. This can even include seismic retrofitting.

The Mills Act was passed to encourage the preservation of old structures. People like to see old homes, and preserving neighborhoods is good for the local economy and helps to build civic pride. As properties are improved, neighborhood property values are likely to rise. The same applies to commercial structures in the revitalization of downtown commercial districts.

Mills Act contracts are for 10 years minimum with automatic 10-year, or yearly extensions, and the contract stays with the property if transferred.

A formula in state law determines how much can be saved on property taxes. New owners will benefit most, especially for properties purchased at peak market prices. Those who have held ownership for many years, particularly those with low taxes (e.g., pre-Prop 13), will benefit the least. Higher priority is typically given to contracts that yield the most significant value of improvements to a historic property, mitigate the risk of deterioration, demolition, or neglect, or perhaps create affordable housing.

Property owners aren’t the only ones to benefit from participation in the Mills Act. Local governments may also allow them to design preservation programs for specific community needs, such as directing priorities toward rehabilitating or preserving entire neighborhoods, encouraging seismic safety programs, and adding to community pride. Local government (City of Eureka—eurekaca.gov/447/Mills-Act) may learn more about the Act through the California State Office of Historic Preservation (ohp.parks.ca.gov), and see examples of tax assessment through the California State Board of Equalization’s Guidelines For The Assessment of Enforceably Restricted Historical Property.

The property must be listed in a city, county, state, or national register, and not be exempt from property taxation. Benefits may apply to either owner-occupied or income property.