This month I’m going to visit with you about a way to save money on property taxes while preserving a piece of California history.

California is home to thousands of historic homes and buildings that tell the story of our communities. Maintaining these properties, however, can be costly. The Mills Act was created to help property owners preserve these historic structures by offering a financial incentive in the form of reduced property taxes.

Enacted in 1972, the Mills Act is a California law that allows cities and counties to partner with owners of qualified historic properties. Through this partnership, a property owner agrees to actively maintain, restore, and preserve their historic building. In return, the property owner may receive property tax relief to help offset the cost of upkeep and rehabilitation.

A Mills Act agreement is a contract between the property owner and the local government. The initial term is 10 years, but it automatically renews each year on its anniversary date. This creates what is known as a “rolling” 10-year term, which means the agreement always has 10 years remaining unless either party chooses to end it, according to program rules.

Once a property enters the Mills Act program, the local government notifies the County Assessor, in Los Angeles County that’s me and the Assessor then calculates the property’s value each year using a special method set by state law. This is called the restricted value.

The Assessor compares three values each year:

1. The current market value.
2. The factored base year value (often referred to as the Proposition 13 value).
3. The Mills Act restricted value.

The lowest of these three values becomes the taxable value for that year. Because the restricted value is often lower than market value, many owners see a reduction in their property taxes. However, Mills Act homes are reassessed annually, so taxes may still rise or fall depending on economic conditions.

Property owners are notified by mail of their Mills Act value each year, typically when the contract is first applied or during the annual assessment notice period in the spring.

Eligibility and application procedures vary by city and county. Generally speaking, though, a property must be officially recognized as historic or be located within a designated historic district. Owners interested in the program should contact their local Planning Department or Community Development office to learn:

• Whether their city or county participates in the Mills Act.
• What historic designation is required.
• The application timeline and criteria.

Even if a property was not previously identified as historic, it may now qualify under updated surveys or preservation standards.

The Mills Act is designed to balance two important goals: protecting California’s architectural heritage and making it financially feasible for owners to care for historic properties. For many homeowners, it provides meaningful tax relief. For communities, it helps ensure that historic buildings remain standing and thriving for future generations.

For more information on the Mills Act go to the Assessor’s website at https://assessor.lacounty.gov/tax-relief/mills-act.

Los Angeles County Assessor Jeff Prang has been in office since 2014. Upon taking office, Prang implemented sweeping reforms to ensure that the strictest ethical guidelines rooted in fairness, accuracy and integrity would be adhered to in his office, which is the largest office of its kind in the nation and provides the foundation for a property tax system that generates about $20 billion annually. Assessor Prang was the 2025 president of the California Assessors’ Association.