Owning an older home can be rewarding—but if your property has architectural, historical, or cultural significance, you may have another opportunity to protect its history while potentially reducing your property-tax burden.
Two programs are often discussed together: Historic designation and the Mills Act. They are related, but they are not the same thing.
Start Here: Two Different Programs
- Historic designation recognizes a property as a historic resource under applicable local, state, or federal programs.
- The Mills Act is a voluntary contract between a property owner and a participating local government that can provide a potential property-tax benefit in exchange for long-term preservation commitments.
- For the City of San Diego, a property must first be locally designated to be eligible to apply for a Mills Act agreement.
In other words, historic designation comes first; a Mills Act agreement is a separate step.
What Is Historic Designation?
Historic designation is the formal recognition that a property, district, or other resource has historical significance. Depending on the program, significance may relate to architecture, important people or events, historical patterns, cultural history, or other recognized criteria.
Designation does not mean that a property can never be changed. It does mean that applicable historic preservation regulations and review requirements may apply to proposed alterations, demolition, or other work.
In the City of San Diego, the Historical Resources Board (HRB) is the decision-making body for individual historic resource designations. City staff reviews nominations and administers the City’s historic preservation programs.
What is the Mills Act?
The Mills Act is a California historic preservation program that allows participating local governments to enter into contracts with owners of qualified historic properties. In exchange for the owner’s commitment to preserve, maintain, and improve the property according to the terms of the agreement, the property may receive a reduced property-tax assessment under the state’s historic property valuation rules.
The tax calculation is different from the standard approach based primarily on comparable sales. The Mills Act valuation uses an income-based methodology established by state law, which can produce a lower assessed value for some properties.
The Mills Act in San Diego County
The Mills Act is a California program, but it is administered locally. That means the requirements, application process, deadlines, fees, and eligibility rules can differ depending on where your property is located.
If your property is in the City of San Diego
You will work with the City of San Diego Development Services Department and its Historic Resources program.
If your property is in the unincorporated County of San Diego
You will work with San Diego County Planning & Development Services and the County Historic Site Board.
If your property is within another incorporated city
Contact that city's planning or historic preservation department to determine whether it has adopted a Mills Act program and what its current requirements are.
How Much Can You Save?
There is no guaranteed percentage of savings. The benefit varies from property to property and depends on factors such as the property’s location, size, income characteristics, comparable rents, and existing assessed value.
The City of San Diego reports that Mills Act reductions have ranged from approximately 20% to 70%. Longtime owners whose properties already have a relatively low Proposition 13 assessed value may see little or no tax benefit.
For that reason, do not assume that a Mills Act contract will automatically produce a large tax reduction. The potential benefit should be evaluated for the individual property.
Who Qualifies in the City of San Diego?
For a City of San Diego Mills Act agreement, the property must be locally designated as a historic resource. National Register or California Register listing alone does not satisfy the City’s local designation requirement.
Eligibility can include individually designated historic properties and properties within established local historic districts, subject to the City’s current rules and program requirements.
When Can You Apply?
The City of San Diego currently accepts Mills Act applications from January 1 through March 31 each year.
To be eligible for that application cycle, the property must have been historically designated by December 31 of the preceding year.
If your property is not yet locally designated, historic designation is therefore the first step—not the Mills Act application.
What Does the City Require?
A Mills Act application is more than a tax-reduction request. The owner must show how the property will be preserved and improved over the life of the agreement.
The City currently requires application materials that include, among other things:
- A proposed 10-year schedule of preservation and improvement work.
- Work consistent with the Secretary of the Interior’s Standards for the Treatment of Historic Properties.
- Cost estimates from qualified contractors for proposed work.
- A current photographic survey showing the street view, elevations, character-defining features, and outbuildings.
- A current grant deed with the property’s legal description.
- Documentation of additions or modifications, when applicable.
- Authority-to-sign documentation when the property is held by a trust, corporation, partnership, or other entity.
The City also states that applications will not be processed when the anticipated tax savings cannot be shown to be invested in the historic property.
The Mills Act Contract
A City of San Diego Mills Act agreement has an initial 10-year term. The contract then automatically renews annually so that 10 years remain on the agreement, unless the required notice is given to stop renewal.
The agreement is tied to the property rather than simply to the original owner. When a Mills Act property is sold, the new owner must understand and assume the responsibilities associated with the existing agreement.
What Are the Owner’s Responsibilities?
The Mills Act is not simply a tax break. It is a preservation contract.
Owners are responsible for maintaining and preserving the historic property and carrying out the work required by the agreement. Work must comply with applicable laws and the standards specified by the contract and local program.
Before signing a Mills Act agreement, an owner should understand the proposed work plan, maintenance obligations, monitoring requirements, and the long-term nature of the commitment.
Does a Mills Act Property Have to Be Open to the Public?
A residential property does not have to be opened to the public for tours simply because it has a Mills Act agreement. The program is based on preservation and maintenance commitments—not a requirement that private homes become public museums.
The Secretary of the Interior’s Standards
The Secretary of the Interior’s Standards for the Treatment of Historic Properties provide nationally recognized guidance for preserving and appropriately treating historic buildings. The City of San Diego requires proposed Mills Act work to be consistent with the applicable standards.
These standards emphasize retaining historic materials and character-defining features while allowing appropriate repair, maintenance, and adaptation.
Historic Designation Has Benefits Beyond the Mills Act
The Mills Act is only one reason a property owner may consider historic designation. Historic resources can also benefit from recognition, a stronger understanding of the property’s history, and access to preservation programs and incentives that may not otherwise be available.
Designation can also help ensure that significant buildings and neighborhoods remain part of San Diego’s story for future generations.
Benefits and Responsibilities at a Glance
- Potential property-tax savings under the Mills Act valuation method.
- A formal preservation agreement with the local government.
- A long-term preservation and maintenance commitment.
- A required work plan identifying anticipated improvements.
- Ongoing compliance with applicable historic preservation standards and regulations.
- The agreement remains with the property when ownership changes.
Current City of San Diego Fees
The City currently lists the following Mills Act fees:
- Mills Act application fee: $1,334.24 one time.
- Monitoring fee: $893.67, due when the agreement is signed and every five years thereafter.
Fees can change. Always confirm the current amounts with the City before applying.
What About Other Cities in San Diego County?
The Mills Act is administered locally. Participating jurisdictions establish their own application procedures, deadlines, fees, eligibility requirements, and contract provisions.
Because local programs can change, SOHO does not recommend relying on an old countywide phone list or a single static list of participating jurisdictions. If you are outside the City of San Diego, contact your city or county planning/historic preservation office and ask about its current Mills Act program.
Thinking About Applying? Start With This Checklist
- Is the property already locally designated as a historic resource? If not, explore historic designation first.
- What is your current property-tax assessed value?
- Would the Mills Act valuation likely provide a meaningful benefit?
- What preservation and maintenance work does the property need?
- Can you document a realistic 10-year work plan?
- Are you prepared for the long-term responsibilities of the contract?
- If you plan to sell, do you understand that the responsibilities fo the agreement continue with the property?
If Your Property Is Not Yet Designated
The City of San Diego has a formal historic resource nomination process. An individual property seeking consideration by the Historical Resources Board requires a nomination and supporting research.
The City’s current nomination materials call for an At-a-Glance Report Summary and a Historical Resources Research Report. City staff reviews the submission before a tentative hearing is set, and the Historical Resources Board makes the final designation decision.
See the City’s current nomination requirements and fees before beginning the process.
Where to Get Current Information
City of San Diego
National Park Service - Preservation Briefs
California Office of Historic Preservation
San Diego History Center - Research Services
Questions About the City of San Diego Mills Act Program
City of San Diego Development Services Department
Email: DSDMillsAct@sandiego.gov
Phone: (619) 235-5224
Unincorporated San Diego County
The Mills Act is also available through the County of San Diego for eligible historic properties located in the unincorporated County. The County administers its own program, with requirements and procedures that are separate from those of the City of San Diego.
Eligibility
To participate in the County’s Mills Act program, a property must be designated on the County Local Register of Historical Resources. Historic designation is therefore a prerequisite to entering into a County Mills Act contract.
How the County Program Works
Mills Act applications are reviewed by the County Historic Site Board, which makes a recommendation to the Director of Planning & Development Services. The County evaluates the proposed preservation work and the owner’s plans as part of the application process.
The Contract
A County Mills Act contract has a 10-year term and automatically extends by one year each year, maintaining a 10-year term unless the contract is cancelled in accordance with its provisions. The agreement is associated with the property, so when a Mills Act property is sold, the contract and its preservation obligations generally continue with the property and apply to the new owner.
Public access and potential tax savings information are the same as with the City program.
Current Application Fee
The County’s 2026 fee information currently lists a $1,670 Mills Act application fee. Fees and program requirements can change, so property owners should confirm the current fee and application requirements with San Diego County before applying.
For current County information
Other San Diego County Cities
- Local administration varies
- Contact your city's planning/historic preservation department
A Note About Older SOHO Information
SOHO has published historic preservation information for many decades. Some older articles and guides remain useful for background, but application procedures, fees, deadlines, contact information, and local regulations can change.
For current Mills Act requirements, always confirm information with the applicable local government before making financial, legal, or property decisions.
A Final Word From SOHO
A historic property represents something larger than its current owner. It carries the stories, craftsmanship, and character of the people and places that came before us.
Research your house. Understand its history. Then explore what historic designation—and perhaps the Mills Act—can do to help preserve it.
Editorial disclaimer: This page is provided for general educational purposes and is not legal, tax, appraisal, or financial advice. Historic designation and Mills Act requirements vary by jurisdiction and may change. Property owners should confirm current requirements, deadlines, fees, valuation questions, and contract terms with the appropriate government agency and qualified professional.
Last reviewed: September 2026
