Historical Properties / Mills Act

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  • Overview

    TAX TIPS
    San Diego County Assessor/Recorder/Clerk
    February 2009

     
    MILLS ACT
    Historical Properties
    A Historical designation in conjunction with a Mills Act contract can potentially provide a property tax reduction. San Diego is a relatively young town, but many residents are beginning to take notice of one of our most valuable resources, our historic sites and houses. The MILLS ACT, named for San Diegan James Mills, a former State senator, provides an important monetary incentive designed to encourage the preservation, maintenance, and restoration of designated Historic properties. If you have questions on the calculation of the assessed value, please call the Assessor's Office at (619) 531-5002.

  • What is the Mills Act?

    The Mills Act provides for potential property tax savings on a property that is subject to a historical property contract. Mills Act properties are to be valued using the rental income and expense that could be expected from that property rather than using comparable sales to establish the assessed value. This generally results in a much lower assessment especially when the property has been recently purchased. ​

  • How does my property qualify for the Mills Act?

    It must meet qualifying criteria such as significant architecture, association with a historically significant event or person, or location in a historic district (such as Marston Hills.) Once designated as a historical site, the owner can then apply for a voluntary contract with that city. The application and approval process is accomplished entirely through the city (or County for unincorporated areas) where the property is located. The Assessor’s office only administers the property tax portion of the Mills Act. ​

  • How long is the contract and is it cancelled if I sell the property?

    The term of the contract is a self renewing, ten year agreement, however, either the property owner or the city can file for non-renewal. As the contract follows the property and not the owner, the contract will transfer uninterrupted on the sale of the property.

  • Is the property owner required to open the property to the public?

    No, the law was revised in 1985 when new legislation relaxed the rules to encourage the preservation of historic properties. Prior to that time, any property under contract had to be open to the public for tours.​

  • Do all historical properties in San Diego County qualify for the Mills Act?

    No, only the cities of San Diego, Chula Vista, Coronado, Escondido, La Mesa, Encinitas, San Marcos, and National City have enacted ordinances to grant a Mills Act agreements. The County of San Diego has also passed an ordinance for historical properties in the unincorporated areas of the County.​

  • How many properties are benefiting under the Mills Act in San Diego County?

    Currently, there are approximately 1,200 properties under contract with the various cities that receive this property tax benefit.

  • What is the Assessor's role in the process?

    The Assessor's Office must determine the assessed value based on a formula under State law, using an income and expense stream that could be generated from the property.​

  • What kind of savings can I expect on my property tax bill?

    Typically, property owners can expect a 20% to 70% savings on their property taxes. Under State law, the lesser of 1) the current market value, 2) the Proposition 13 value, or 3) the restricted Mills Act value will be used to calculate your property taxes. It is possible that the Proposition 13 value may be lower than the restricted value, and the property would receive no property tax benefit.​

  • Since I have owned my property for many years and already have a low assessment, is it worthwhile to apply for the Mills Act?

    Some owners who would receive no property tax benefit still apply for the Mills Act. It can be a selling point to a potential buyer because the property would not be reappraised at its full market value upon sale if it were already under a Mills Act contract.​

  • Once my property is listed on the Historic Register, are there any binding restrictions that will affect my property?

    Yes, once that property is designated on a Federal, State, or local register, it is subject to the rules and regulations of the Office of Historic Preservation of the Department of Parks and Recreation, the U.S. Secretary of the Interior's Standards for Rehabilitation, and the Historic Building Code. In effect, the owner must protect, maintain, and rehabilitate the property into perpetuity.​

  • Mills Act Benefits
    • Possible reduction in property taxes - average of 20% to 70%
    • No supplemental bills if under contract at the time of transfer or completion of new construction
    • Transferable if property is sold
  • Mills Act Restrictions
    • 10-year self-renewing contract there is a substantial financial penalty if put into non-renewal status
    • Once a property is designated as a Historical Property, it must be permanently maintained as a historical site ​
  • Who should I contact if I want to place my property under the Mills Act?

    Each city has its own ordinance and different criteria to determine if a particular property qualifies. Please contact the following departments to get further information:

    • San Diego - Historical Resources Bd., 619-235-5224 www.sandiego.gov/planning
    • Chula Vista - Planning Dept., 619-409-5465 or 619-585-5621
    • Coronado - Community Development Dept., 619-522-7326
    • Encinitas – Planning Dept., Community Development, 760-633-2680
    • Escondido - Planning Dept., 760-839-4553
    • La Mesa - Community Development Dept., 619-667-1177
    • National City - Planning Dept., 619-336-4310
    • County of San Diego - Dept. of Planning and Land Use, Historical Properties, 858-694-2981 or 858-694-3656
    • San Marcos – Planning, 760-744-1050


     

 Electric Power Plant

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  • Where can I obtain additional information on the assessment of power plants in San Diego County?

    Additional information concerning the assessment of power plants can be obtained by calling the Assessor's Office at (858) 505-6262.​

  • Are there plans for new power plants in San Diego County?

    Yes. There are plans for a major electric generating plant in Otay Mesa, east of the prison sites.​

  • Do these power plants generate all the electricity used in San Diego County?

    No. Much of our electricity is imported through transmission lines from generating plants outside the county. Those transmission lines located in San Diego County, however, are assessed for property tax purposes.​

  • How does the Assessor's Office determine the taxable value of these power plants?

    The market value of power plants is determined after analyzing the purchase price, sales of similar power plants, replacement cost and income received from the sale of electricity. ​

  • Who assesses these power plants for property tax purposes?

    Prior to last year, State law required the State Board of Equalization to assess all the public utilities power plants. The law was changed and now the local Assessor's Office must appraise any power plants that are sold.​

  • Who purchased these power plants?

    The South Bay Power Plant was purchased by the Port of San Diego and leased to Duke Energy Power Services. The Encina Power Plant was purchased by Dynegy and NRG Energy Inc.​

  • What two electric generating plants were recently sold in San Diego County?

    The two facilities recently sold in San Diego County were the South Bay Power Plant in Chula Vista and the Encina Power Plant in Carlsbad.​

  • How many power plants are in San Diego County?

    There are three major power plants in San Diego. They are the South Bay Power Plant, the Encina Power Plant, and the San Onofre Nuclear Generating Station. There are also several smaller generating plants in San Diego County that can be used as back up during times of peak demand.​

  • What is an electric generating plant?

    An electric generating plant is a facility that uses natural gas, oil, coal or uranium, to power large turbines that create the electricity we use in our homes and businesses.​

  • Overview

    The recent news articles covering the sale of two of San Diego Gas & Electric's electric generating plants in San Diego County resulted in numerous inquiries concerning the assessment of these facilities for property tax purposes. Below are some of the most frequently asked questions concerning these power plants.​

     

 Indian Reservations

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  • Overview

    The Assessor's Office is frequently asked if businesses and homes on Indian lands are assessed for property tax purposes. Below are some of the most frequently asked questions concerning assessments on Indian reservations. For additional information on these types of assessments, please call the Assessor's Office at (619) 531-6468.​

  • What is an Indian reservation?

    An Indian reservation is land owned by the U. S. Government which is held in trust for Indians (native-Americans).​

  • How many Indian reservations are there in San Diego County?

    There are twenty (20) Indian reservations in San Diego County covering over 129,000 acres as shown below:

    Acres
     
    Acres
    Barona
    7,098
      Manzanita
    3,563
    Campo
    15,674
      Mesa Grande
    1,831
    Capitan Grande
    15,642
      Pala
    12,579
    Cuyapaipe
    5,549
      Pauma and Yuima
    5,891
    Inaja and Cosmit
    848
      Rincon
    4,025
    Jamul
    6
      San Pasqual
    1,420
    La Posta
    3,737
      Santa Ysabel
    15,345
    La Jolla
    8,876
      Viejas
    1,597
    Los Coyotes
    24,788
      Sycuan
    806

  • Are the Indian-owned gambling casinos on Indian reservations assessed for property taxes?

    No. These specific businesses are owned by Indians on trust lands and under Federal law, exempt from property taxes.​

  • Are the recently completed restaurants and gambling areas at the Viejas Casino & Turf Club assessable for property tax purposes?

    No. These new additions are owned by Indians on trust lands and under Federal law, exempt from property taxes.​

  • Will the planned expansion by some tribes into hotel and golf course projects create assessments for property taxes?

    If the expansion occurs on land that is not held in trust or if they are not owned and operated by the tribe, they will be assessable for property taxes. ​

  • Can properties owned by Indians on reservations be taxable?

    Yes. Land owned by an individual Indian in "fee title" rather than held "in trust" is taxable.​

  • Are there any businesses on Indian reservations that are taxable?

    Yes. Any business on Indian reservations that is owned, leased by, or operated by a non-Indian is taxable. The most common examples of these include sand and gravel operations, RV campgrounds, and retail outlets.

  • Are the new retail outlet stores at Viejas assessed for property tax purposes?

    Yes. The outlet stores themselves are assessed not to the Indians but to the actual companies that own and operate them.​

  • How can I obtain additional information on Indian reservations?

    Additional information on Indian reservations can be obtained by contacting the Bureau of Indian Affairs, 3600 Lime Street, Suite 722, Riverside, CA 92501, or by calling (714) 276-6624.​

 Parent / Child Exclusion

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  • Overview

    Did you know that transfers between parents and children will not cause a reassessment for property tax purposes? The following questions and answers help explain this exclusion program. For further information, please call the Assessor's Office at (619) 531-5848.​

  • What is the purpose and benefit of the parent/child exclusion?

    This exclusion prevents an increase in property taxes when real property is transferred between parents and their children.​

  • What type of property can be transferred without a tax increase?

    The principal place of residence and up to $1 million in assessed value of any other real property may be transferred by each parent or child without a property tax increase.​

  • What are "children" for the purpose of this exclusion?

    Natural children, children adopted before the age of 18, stepchildren (as long as the parents are still married), and sons- and daughters-in-law are considered children under this exclusion program.​

  • Is there a filing deadline for this exclusion?

    A claim should be filed within three years of the date of transfer or death, or prior to a transfer to a third party. In addition, a claim may be filed within six months after the mailing date of the supplemental notice or escape assessment.​

  • Do transfers between grandparents and grandchildren qualify for this exclusion?

    The only time the transfer from grandparent to grandchildren will qualify is if the "middle generation" is deceased and the transfer is on or after March 27, 1996.​

  • Can property held in a trust qualify for this exclusion?

    Yes. A copy of the trust should be submitted with the application.​

  • Can property held by a corporation or partnership qualify?

    No. In order to qualify, the property must be transferred to the individual owner's name before the application is submitted.​

  • How do I qualify for a parent/child exclusion?

    In order for one to qualify, an application form must be filed with the Assessor's Office. To obtain the necessary application, please call the Assessor's Office at (619) 531-5848.​