Mills Act San Diego
One of the most sought after property types in San Diego’s older neighborhoods is “historic.” Not only do such homes often showcase over a century of character, charm and architectural integrity, but they can also afford their owners a financial benefit referred to as the Mills Act. With property prices on the rise in America’s Finest City, historically designated homes with the Mills Act have become even more desirable in light of the property tax savings they provide owners. For example, our listing at 2335 Juan Street is currently listed for $3,780,000 and would otherwise result in annual property taxes totaling around $40,000 at the time of sale. With the Mills Act in place, the next owner would pay a much reduced amount closer to $11,000. Another example of Mills Act savings is the Historic Starkey Estate at 21 F Street which we currently have listed for $1,590,000. Annual property taxes for this 2-acre property total $4,574 in 2016. The logic behind the Mills Act is that owners will use their property tax savings to help rehabilitate, restore and maintain their historic homes. The Mills Act is the single most important economic incentive program in California for the restoration and preservation of historic buildings by private property owners.
There are many questions surrounding older homes in neighborhoods such as Mission Hills, Bankers Hill, Coronado, Point Loma and La Jolla. Many do not realize that applying for a historic designation and obtaining the Mills Act are actually two separate processes. As such, you will sometimes encounter a historically designated home that does not yet have the Mills Act in place as in the case of the iconic estate at 2121 Sunset Blvd, designated the Berth P. Mitchell House. We are often contacted by both buyers looking for historic homes and by homeowners wanting a better understanding of the pros and cons associated with historic designation. Some historic homeowners opt not to pursue the Mills Act as their property tax basis is already so low given how long they have owned their home. The more often asked questions are: How does one get their home historically designated? How much does it cost? How long does the process take? Once designated, how does a home owner then apply for the Mills Act? For the more home-specific questions such as “Is my home eligible for historic designation?” or “Can I add a second story once my home is designated?” we often refer clients to our contacts at the Historical Resources Board.
Historic homeowners are the guardians of many architectural eras from the Richard Requa residences of the 1920s to the Homer Delawie dwellings of the 1960s. The Hernholm Group is therefore privileged to have represented over 70 historic home sales in San Diego County.