Ben Kahle, founder of Historic Real Estate LA obtained the first Mills Act Contract in Unincorporated LA County on his personal home. He has a vast knowledge regarding the process. Historic Real Estate LA has been called on to sell many Mills Act homes across LA City due to our experience with this complex program. If you have any questions regarding Mills Act feel free to contact us.
Could a preservation contract cut your Los Angeles property tax bill while helping you care for a historic home? If you own or love architecturally significant properties, the Mills Act is likely on your radar. It swaps a commitment to preserve your home’s character for a property tax assessment method that often lowers annual taxes. In this guide, you will learn what the Mills Act is, how it works in Los Angeles, who qualifies, what savings look like, and how to take the next step. Let’s dive in.
Mills Act basics --
MILLS ACT BASICS -- ** THE MILLS ACT PROGRAM IN LA CITY IS CURRENTLY ON HOLD. HOWEVER, OTHER MUNICIPALITIES SUCH AS UNINCORPORATED LA COUNTY CURRENTLY HAVE ACTIVE MILLS ACT PROGRAMS. PLEASE RESEARCH YOUR CURRENT OR FUTURE MUNICIPALITY AND NEIGHBORHOOD REGARDING THE STATUS OF POTENTIAL MILLS ACT PROGRAMS AND PROCESS OR LACK THEREOF.
The Mills Act is a California program that lets cities and counties sign preservation contracts with private property owners of qualified historic resources. In exchange for maintaining and preserving the property, your home is assessed using a special valuation method that usually reduces property taxes compared with standard assessments. The program is voluntary, contract based, and administered locally.
In plain terms, you agree to preserve, and the City agrees to recognize your stewardship through a different property tax calculation. Many owners use this reduction to fund ongoing care and sensitive rehabilitation.
How it works in Los Angeles
In Los Angeles, the program is administered by the City’s Office of Historic Resources, with review by the Cultural Heritage Commission. Local approval generally includes staff review, a Commission recommendation, and final City action. Always check current OHR notices for the latest steps, deadlines, and any annual caps.
A Mills Act contract is recorded on title and sets your preservation obligations and term. Contracts commonly run a minimum of 10 years and may renew on a rolling basis, subject to current City contract language. You will agree to a scope of work, follow appropriate preservation standards, and provide periodic reports and photographs.
Once the contract is recorded, the County Assessor revalues the property using an allowed approach, often an income method. That reassessment typically results in lower annual property taxes than a standard market value assessment.
Who qualifies in Los Angeles
To be considered, a property typically needs an eligible historic designation. Common qualifying categories include:
- City Historic‑Cultural Monument status.
- Contributing resource within a local historic district, such as an HPOZ.
- Properties listed in or eligible for the National Register or California Register, depending on current local rules.
Many programs use a 50‑year age threshold unless there is exceptional significance. Both owner‑occupied homes and income properties can qualify. You will need documentation that shows the property’s historic significance and condition. If your property is not yet designated, you may need to pursue designation before applying for a contract.
What tax savings look like
Owners often see meaningful reductions once the Assessor applies the alternative valuation method under a Mills Act contract. Typical property tax reductions are often in the 40 to 60 percent range, but results vary by property type, location, use, and the Assessor’s inputs.
Some single‑family owners report savings from several thousand dollars per year to much higher amounts. Your outcome depends on factors like market value, allowed uses, and whether the income approach yields a significantly lower value than market. For a property‑specific estimate, contact the Los Angeles County Assessor before you rely on a target amount.
Owner obligations and restrictions
A Mills Act contract is a preservation agreement. You must keep the property in good repair and complete the agreed scope of work. Major changes that affect historic character will typically require City review and approval.
Work is expected to follow recognized preservation standards, such as the Secretary of the Interior’s Standards for Rehabilitation. Contracts usually require an annual report with photos that show maintenance and completed work. The City monitors compliance, and noncompliance can lead to contract issues or cancellation.
Potential downsides include tighter review of renovations, possible limits on timing or methods, and the chance that your property may not realize large tax savings compared with market assumptions. If you want to end a contract early, local contract rules control feasibility and consequences.
Buying or selling with a Mills Act
Mills Act contracts are recorded on the property and generally transfer to the new owner at sale. As a buyer, review the recorded contract and preservation plan during due diligence so you understand the obligations and tax terms. Ask the Assessor how valuation will apply after transfer.
Most lenders focus on market value and condition. Many will simply request a copy of the contract and confirm your obligations during underwriting. It is wise to engage your lender early and share the preservation scope.
Step‑by‑step path in Los Angeles
- Step 1: Confirm historic status. Determine whether the property is a City Historic‑Cultural Monument, a contributing resource in an HPOZ, or listed in the National or California Register.
- Step 2: Contact the Office of Historic Resources. Ask about current program rules, application windows, any annual caps or priorities, and fees.
- Step 3: Consult the County Assessor. Request a preliminary Mills Act estimate and ask how contracted values are calculated for properties like yours.
- Step 4: Prepare documentation. Assemble a statement of significance, photos, a property description, and a proposed scope of preservation or rehabilitation work.
- Step 5: Secure professional help. Consider a preservation architect, a historic consultant, and contractors experienced with City reviews. Consult a tax professional for local tax considerations.
- Step 6: Submit and follow review. OHR reviews your application, the Cultural Heritage Commission typically makes a recommendation, and final approval follows the City’s process. If approved, the contract is recorded and the Assessor revalues the property.
- Step 7: Comply and document. Maintain the property, complete your scope of work, and file required annual reports with photos.
Is the Mills Act right for you
The Mills Act can be a strong fit if you value preservation, plan sensitive work, and want a predictable way to fund ongoing care. It can be especially impactful for higher assessed properties and income‑producing buildings where the income approach differs from market value. If you prefer unrestricted renovations or are not ready for ongoing reporting, it may not be the best match.
Before you decide, confirm eligibility, request an Assessor estimate, and review current OHR program notices and contract language. A clear plan and realistic budget will help you get the most from the program.
A preservation‑minded partner
If you are considering a Mills Act application, buying a contracted property, or preparing a historic home for market, you do not have to navigate it alone. Historic Real Estate LA pairs preservation expertise with market strategy, from designation and contract guidance to a vetted network of restoration artisans and thoughtful listing preparation. Ready to explore your options or discuss a specific property? Connect with Benjamin Kahle to start a tailored conversation.
FAQs
What is the Mills Act in Los Angeles?
- It is a voluntary preservation contract with the City that typically lowers property taxes in exchange for maintaining and preserving a qualified historic property.
How much can Mills Act reduce LA property taxes?
- Many owners see property tax reductions of about 40 to 60 percent, but actual savings vary by property type, use, and Assessor methodology.
Who qualifies for a Mills Act contract in LA?
- Properties with local or recognized historic designation often qualify, such as City Historic‑Cultural Monuments and contributing resources in HPOZs, subject to current City rules.
Does a Mills Act contract transfer when I sell?
- Yes, the contract is recorded on the property and usually transfers to the new owner, who must comply with the preservation obligations.
How do lenders treat Mills Act properties?
- Most lenders focus on value and condition, and they may request a copy of the contract; discuss terms with your lender early in the process.
Does the Mills Act require public access to my home?
- Typically no; these are preservation contracts, not public access agreements, though you should confirm the specific contract language for your property.
