Is the Mills Act the key to lowering your Mission Hills property taxes while preserving what makes your home special? If you own or hope to buy a historic property here, you want clarity you can trust. In this guide, you’ll learn what the Mills Act is, how it works in the City of San Diego, what savings to expect, and how to decide if it fits your plans. You’ll also get practical steps tailored to Mission Hills. Let’s dive in.

What the Mills Act is

The Mills Act is a California program that lets cities and counties sign contracts with private owners of qualified historic properties. In exchange for preserving your home’s historic features, you can receive property tax relief. Contracts are recorded against the property and typically remain in force when the home sells, so buyers can inherit both the benefits and obligations.

In San Diego, contracts are written for a minimum of 10 years and automatically renew each year, creating a rolling 10-year commitment unless terminated under the contract’s terms. To qualify, a property must first be locally designated as a historic resource. That can include a designated landmark, a contributing resource in a local historic district, or a property on the local register.

How it works in San Diego

The City of San Diego Historical Resources Board (HRB) evaluates eligibility and approves Mills Act contracts. City Historic Resources staff prepare and process applications and contracts. After approval, the San Diego County Assessor completes a special appraisal that sets the reduced assessed value for your property taxes.

Most locally designated property types can qualify, including single-family homes, multi-family buildings, and some commercial properties, as long as they have private ownership. Publicly owned properties are not eligible.

Tax savings and the special appraisal

Under the Mills Act, the County Assessor applies a special appraisal method that often uses an income-based approach or other techniques tailored to historic properties. This can set a lower assessed value than market comparables alone. Your property tax rate still applies, but because the assessed value can be lower, your annual tax bill may decrease.

Savings vary widely by property and appraisal inputs. Many owners experience meaningful reductions often described as several tens of percent off a typical bill, with statewide ranges commonly cited around 30 to 60 percent. Your actual outcome in Mission Hills depends on the Assessor’s special appraisal.

The Mills Act does not bypass Proposition 13 rules, but the special appraisal establishes a different assessed value for qualified historic properties. If you sell, the contract usually transfers to the buyer, which can be attractive to those seeking long-term tax relief. Some buyers and lenders weigh the preservation obligations when valuing a property, so the effect on resale is case-specific.

Owner duties and limits

A Mills Act contract requires you to preserve, maintain, and repair the character-defining historic features of the property for the full term. Work generally follows accepted preservation standards. Obligations can include exterior and, in some cases, interior features if those are part of the property’s significance.

Alterations and repairs typically require review and approval by the City’s Historic Resources staff to confirm consistency with the contract and preservation standards. You still need building permits and must meet current codes. The Mills Act does not waive safety or code upgrades, though work can often be planned to retain historic fabric.

Local programs may require periodic inspections or annual reports showing completed work and compliance. Serious violations can lead to enforcement or termination, which may carry tax consequences depending on the contract and local rules. Compatible upgrades for livability, like kitchens, bathrooms, and systems, are commonly allowed when done sensitively.

Mission Hills considerations

Mission Hills is rich with early-20th-century architecture, including Craftsman bungalows, Spanish Colonial Revival, Mission Revival, and Tudor Revival homes. Period multi-family buildings and small apartments also contribute to the neighborhood’s character.

Common preservation needs here include wood siding and trim repair, porch restoration, original wood window repair, stucco and clay tile roof work, and foundation or seismic upgrades planned with care. Landscape and site features like original retaining walls, walkways, and decorative ironwork often become part of preservation scopes.

Examples of scope-of-work items that often appear in agreements include:

• Maintain and repair original wood siding and trim, replacing in-kind as needed.
• Restore porches and railings to historically appropriate designs.
• Use historically appropriate roofing on visible roof planes.
• Repair and maintain original windows, or use compatible replacements if necessary.

Should you apply?

The Mills Act can lower long-term carrying costs for owner-occupants and buyers who plan to hold for years, which is helpful in a high-priced area like Mission Hills. For sellers, an active contract can be a selling point for preservation-minded buyers, though some may discount value due to perceived restrictions or future compliance costs.

Consider these points:

• Pros: meaningful potential tax reduction, support for ongoing preservation, and benefits that typically transfer to a buyer.
• Cons: long-term obligations that may limit certain alterations, upfront preparation costs, and added administrative steps for renovations. Actual tax savings are unpredictable until the Assessor completes the special appraisal.

The Mills Act may not fit if you plan to sell soon, want to undertake major non-historic alterations, or are unwilling to take on preservation work outlined in a contract.

How to get a contract

Here is the typical process in the City of San Diego:

1. Confirm local designation. Your property must be on the City’s Historical Resources Register or designated by the HRB. If it is not yet designated, pursue landmark designation first.

2. Contact Historic Resources staff. Request eligibility guidance and the current application packet and checklist.

3. Prepare your application. This includes the designation report, photographs, a proposed list of preservation obligations or work, ownership information, and any required fees.

4. HRB review and hearing. The HRB considers your application. Public notice and a hearing are usually part of the process.

5. Execute the contract. If approved, the City prepares a Mills Act contract, which you sign. The contract is then recorded with the County Recorder.

6. Assessor appraisal. The San Diego County Assessor performs the special appraisal to establish the new assessed value and tax savings.

Timelines vary. Straightforward, already designated properties can sometimes move in a few months, while projects needing designation or added studies often take 6 to 12 months or more. Fees include City application and processing charges. Many owners also budget for professional help such as preservation consultants, architects, or attorneys, along with any documentation or appraisal support. Costs range from modest to several thousand dollars depending on scope. Always ask the City and County for their current schedules and procedures.

Buyer and seller checklists

If you are selling a designated property or one with a Mills Act contract, gather:

• A copy of the recorded Mills Act contract.
• A summary of preservation obligations, noting whether interiors are included.
• Recent annual reports, inspection notes, invoices, and any compliance correspondence.
• Copies of prior permits and HRB approvals for alterations.

If you are buying or considering an application, ask:

• The City/HRB: Is the property designated and eligible? What are the fees, submittal requirements, and meeting schedules? What annual reporting or inspections are required?
• The County Assessor: What is the special appraisal process, documentation, and timing? How have similar properties generally been handled?
• Professionals: Have a preservation architect or consultant estimate costs for required work. Ask a local real estate advisor about buyer demand and comparable sales with and without Mills Act contracts.

Smart next steps

If you already own in Mission Hills, request a copy of any existing Mills Act contract and review the obligations. If you are buying, factor the potential tax relief and the scope of preservation work into your offer strategy and long-term budget. Contact City Historic Resources staff early to confirm eligibility, and speak with the County Assessor about the appraisal timeline.

If you want guidance tailored to your home, work with a team that understands both historic stewardship and local market dynamics. With more than 150 historically designated home sales and a deep track record in 92103, we can help you evaluate the Mills Act within your broader goals, position your home for the right buyer, or find the property that fits your long-term plan. Connect with the Hernholm Group for thoughtful, preservation-aware representation.

FAQs

How much can Mills Act lower my taxes in Mission Hills?

• Savings vary by property and the County Assessor’s special appraisal. Many owners see meaningful reductions often cited around 30 to 60 percent, but your result is case-specific.

Does the Mills Act let me modernize the interior?

• Yes, livability upgrades are commonly allowed when done sensitively. Preservation obligations focus on character-defining features, and interiors apply only if specified in the contract.

Will the Mills Act contract transfer if I sell?

• Typically yes. Mills Act contracts are recorded and usually remain in force for the buyer, who takes on the tax benefits and the preservation obligations.

Does the Mills Act require public access to my home?

• No. Routine Mills Act contracts do not require public access. Some local agreements can include public benefit terms, but access is not a standard requirement.

When is the Mills Act not a good fit?

• If you plan a short-term sale, want major non-historic alterations, or prefer not to take on preservation work or reporting, the program may not align with your goals.

How long does it take to get a Mills Act contract in San Diego?

• Timelines vary from a few months for straightforward cases to 6 to 12 months or more if designation or added studies are needed. Ask the City and County for current schedules.