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Mills Act

Last modified: 3/5/2012 11:58 AM
The Mills Act is a state-sponsored economic incentive program offering a reduction in property taxes for owners of "qualified historical properties" who pledge to preserve, restore, rehabilitate, and maintain the historical and architectural character of their properties. The Mills Act furthers the County's General Plan goals of restoring and enhancing historic resources. The resulting effects are the promotion of heritage tourism, visual enrichment of our experience of urban and rural landscapes, and a fostering of pride in ownership.

What is a Qualified Historical Property?
A "qualified historical property" is privately owned, not exempt from property taxation, and listed on any official federal, state, county or city register. A property includes the qualified historical improvement and may also include any land on which it is situated.

How Do I Participate in the Mills Act?
If the property is already a "qualified historical property"

  1. The applicant submits a Mills Act application to the Planning Office.
  2. The application, including a plan for preservation, will be evaluated by the Historical Heritage Commission (Commission) at a regular monthly public meeting. The Commission makes findings whether the property is a "qualified historical property" and whether the
  3. If the Commission recommends approval to the Board of Supervisors (Board), a preservation contract will be prepared by the Office of the County Counsel which incorporates the standards and/or conditions stipulated by the Commission and agreed upon by the property owner.
  4. The recommendation of the Commission and the preservation contract will be presented to the Board for approval or denial. (Note: Entering into a Mills Act contract is discretionary by the Board.)
  5. If the Board confirms the findings of the Commission, the preservation contract will be approved and formally executed between the property owner and the County of Santa Clara.
  6. The Assessor's office will then make the appropriate changes to the assessment roll.

If the property is not already a "qualified historical property"?

  1. It must meet the eligibility criteria for listing on any official federal, state, county or city register.
  2. The owner must complete the historic designation process prior to submitting a Mills Act application.

What are the General Terms of a Preservation Contract?
At a minimum the contract will include, but not be limited to, the following items:

  • A 10 year term, automatically renewable each year unless the non-renewable procedures have been implemented.
  • A plan for restoration, rehabilitation or preservation of the property to conform to the previously cited historic preservation standards and codes as required by the Mills Act.
  • Requirement for periodic examination of the property by Commission staff to assure compliance with the contract.
  • Requirement that the contract will be recorded by the Assessor and will bind all future successors in interest for the duration of the contract.
  • Requirement that the owner or agent shall provide written notice of the contract to the State Office of Historic Preservation within 6 months of entering into the contract.
  • Use restrictions the Board deems reasonable to carry out the purpose of the contract.
  • Non-renewable/cancellation provisions as provided by the Mills Act. (Note: The Board may cancel a contract after the prescribed process is followed if it determines that the owner has breached any of the conditions of the contract, allowed the property to deteriorated to the point that it no longer meets the standards for a "qualified historical property" or determines the owner has failed to restore or rehabilitate the property in the manner specified in the contract.)
  • Method of assessment as provided by the Mills Act.

How Will My Tax Rate be Adjusted?
Property under a Mills Act preservation contract will be valued by the capitalization of income method. The modified property tax rate will vary from property to property based on each individual appraisal. Property owners who have a pre-Proposition 13 tax rate (no change of ownership since March 1, 1975) will probably not see a tax reduction.

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