On January 13, 2011 the City Council adopted the Mills Act Program for Palm Desert. The Mills Act is state legislation, enacted in 1972, to provide property tax relief to owners of historic properties for the purpose of assisting in the expense of restoration and maintenance. To qualify, a historic property must be listed on a national, state, county, or city register. Although it is applicable to historic income producing properties, it is the single most important economic incentive program available in California for owner occupied historic residential buildings, particularly single-family homes. A Mills Act program is developed in accordance with California Government Code, Article 12, Sections 50280-50290 and California Revenue and Taxation Code, Article 1.9, Sections 439-439.4.
Under the program, property owners receive a significant reduction in local property taxes in exchange for their promise to actively participate in restoring, rehabilitating, repairing and preserving their properties. Participants enter into a perpetual 10-year contract with the City. Contracts are automatically renewed each year and are transferred to new owners when the property is sold. The act provides for inspections, as needed, by city, county, or state officials. Penalties may be imposed for breach of contract or failure to maintain the historic property.
Actual property tax savings are calculated by the County Assessor’s Office using a state-mandated reassessment formula based upon “capitalization of income” rather than simple “market value.” Mills Act participants may realize a property tax savings of averaging about 50% each year depending on property value, net operating income, and other variables.
The City accepts applications during the month of June every year. The internal review process is completed by late fall, when qualified applications are forwarded to City Council for consideration. Approved contracts are forwarded to the County Assessor. Tax credits are effective the following fiscal tax year, when restoration work, according to the contract, may commence. For more information contact Russell Grance, Cultural Resources Administrator at (760) 346-6420.