Historical Property Contracts
The Mills Act
Approximately 750 properties in Sacramento County are currently listed on a federal, state, county or city register of historical properties. If a registered historical property is also encumbered by what is known as an "Historical Properties Contract" between its owner and the city or county having jurisdiction over the property, it may also be entitled to property tax treatment under Revenue & Taxation Code Sections 439-439.4 (also known as the Mills Act). Properties assessed under the Mills Act generally see some reduction in property taxes.
It is important to understand that a property's mere presence on a register of historical properties does NOT in itself qualify the property for Mills Act treatment. It must also be encumbered by an historical property contract as specified in Revenue & Taxation Code Sections 439-439.4. Of the 750 registered historical properties in Sacramento County, only two are encumbered by such a contract as of 2006.
- Historical Property Contracts must have a minimum term of 10 years and are binding on all subsequent owners of the property. Among other things, those contracts impart certain responsibilities for maintenance and preservation upon the owner, and require the owner to provide certain government entities periodic access to the property.
- Government Code Section 50280 states that a city or county may enter into such a contract with a property owner; however, it does not require the city or county to do so.
Once its owner secures an historical property contract, the Assessor will be required to assess a property in the manner specified in Revenue and Taxation Code Sections 439-439.4. For property tax purposes, the contract becomes effective on the lien date following the date the contract is signed.
Historical properties which do qualify for the Mills Act property tax treatment specified may benefit in property tax reductions.
Such qualified properties are reassessed annually using specified formulas.
The Assessor is not involved in the process leading to the contract itself. The formal procedure for initiating such contracts is administered by the following agencies:
For information on properties within the cities of Citrus Heights, Elk Grove, Folsom, Galt, Isleton, or Rancho Cordova, please contact the planning departments regarding potential historical properties. A web link to each jurisdiction website can be found on the Sacramento County "Cities In The County" web page.
The State of California, Office of Historic Preservation website also provides Mills Act information http://www.ohp.parks.ca.gov.
Published comprehensive California State Board of Equalization Guidelines for the assessment of enforceable restricted historical property and examples of Section 439 assessment procedures can be found at http://www.boe.ca.gov/proptaxes/pdf/lta05035.pdf.
For any additional questions regarding historical property assessment, contact the Assessor's Assessment Standards Division at (916) 875-0700. You may also contact the State Board of Equalization's Technical Services Unit at (916) 274-3350.