Mills Act

The Mills Act is a state law allowing cities to enter into contracts with owners of qualified historic properties who actively participate in the restoration, rehabilitation and maintenance of their property. The owner may be granted a reduction of property taxes in exchange for the continued preservation of the property.

Who is eligible for the Mills Act?

A qualified historical property is privately-owned property that is not exempt from property taxation and that also meets either of the following criteria:

Contract Specifics

The historical property contract must have a minimum term of ten years, and, as applicable, must contain certain other elements, including the following:

  • A provision relating to the preservation of the qualified historical property and, when necessary, the restoration and rehabilitation of the property in conformance with state historic preservation guidelines;
  • A requirement for the periodic examination of the property to ensure compliance with the agreement;
  • A requirement that the historical property agreement be binding upon successor owners of the qualified historical property; and
  • A provision for an automatic one-year extension of the contract, with an additional year added to the initial contract term on each anniversary of the contract, unless either party provides notice of nonrenewal. If a notice of nonrenewal is given, the contract runs for its remaining term.
Once a contract is signed, accepted, and recorded, the property subject to the contract must be assessed under section 439.2 on the ensuing lien date.

Frequently Asked Questions

What is the Mills Act Program?

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 Government Code, Article 12, Sections 50280 - 50290

California Revenue and Taxation Code, Article 1.9, Sections 439 – 439.4