Thinking about buying or owning a historic home in Kensington and wondering how the Mills Act could help? You are not alone. Many San Diego homeowners love the character of older homes but want clarity on tax savings, rules, and long-term responsibilities. In this guide, you will learn how the Mills Act works in San Diego, who typically qualifies in Kensington, what to expect financially, and the practical steps to get started. Let’s dive in.
What is the Mills Act
The Mills Act is a California program that lets cities and counties offer property tax relief to owners of qualified historic properties. In exchange, you agree to preserve and maintain your home under a recorded contract with the local government. The program is authorized by state law and administered locally, so rules and procedures vary by city.
In practice, you enter into a multi-year contract that focuses on preservation and maintenance. Contracts commonly run for at least 10 years, renew each year, and stay with the property when you sell. Your obligations, penalties, and renewal mechanics are defined in the contract used by the local jurisdiction.
How tax savings work
Under a Mills Act contract, the county assessor uses an alternative valuation method that often results in a lower assessed value than the standard approach. Many owners report meaningful savings, although the exact amount depends on the assessor’s methodology, the property type, and local practice.
Savings are not one-size-fits-all. The best way to understand your potential benefit is to ask the San Diego County Assessor whether a preliminary estimate is possible for your parcel and how valuation is performed locally. This sets realistic expectations before you invest time in an application.
Who qualifies in Kensington
Kensington sits within the City of San Diego, so city rules apply. To be eligible, a property generally must be a qualified historic resource. That often means local designation by the City of San Diego’s Historic Resources Board or recognition through other city procedures. National Register listing can help, but it is not required in most local programs.
Age alone does not guarantee eligibility. Your home must be historically significant and retain enough historic integrity, especially in character-defining exterior features. Even if the property has been altered, it can still qualify if key features remain or can be preserved under an agreed work plan.
Owner obligations and upkeep
When you receive tax relief, you take on preservation commitments. Most contracts include a Work Program or Preservation Plan that outlines required maintenance and rehabilitation over time. You will need to keep the property in good condition to meet the standards described in your contract.
Expect review for exterior changes, especially those visible from the street. Interior work is often treated differently, but always confirm what your contract and local procedures require. Some programs include annual inspections, reporting, or monitoring fees, so ask about administrative requirements and schedules.
Buying or selling with a Mills Act
Mills Act contracts are recorded and typically transfer with the property when you sell. As a buyer, you assume both the tax benefit and the preservation obligations. As a seller, you should disclose the contract early so the buyer, lender, and title company can review it and plan accordingly.
Most loans are possible on properties with a Mills Act contract. Still, lenders and title companies may request documents and timelines, so start those conversations early. If you plan to refinance, be prepared to share the recorded contract and any recent correspondence with the city regarding compliance.
Step-by-step: How to apply
If you own or are purchasing a Kensington home that may qualify, use this high-level checklist to get organized:
- Confirm historic status
- Check whether the property has a City of San Diego historic designation or another recognized status under city procedures.
- Contact city preservation staff
- Request current Mills Act application materials, eligibility criteria, and any city priorities or annual limits.
- Ask the assessor about savings
- Contact the San Diego County Assessor to learn how Mills Act valuation is done locally and whether you can get a preliminary estimate for your parcel.
- Prepare your application
- Typical items include proof of designation, a proposed Work Program or Preservation Plan, photographs, and owner details. Follow city formatting.
- Follow the public review process
- Expect staff review and Historic Resources Board hearings. In some cases, a city official or City Council finalizes approvals. Timelines vary by workload and meeting schedules.
- Execute and record the contract
- Once approved, the city signs the Mills Act contract and records it. The assessor then applies the new valuation going forward.
Documents and questions to prepare
Having a concise packet helps the process move smoothly:
- Current deed, parcel number, and property tax bill
- Evidence of historic designation or a recent evaluation report
- Photographs and a summary of recent or planned work
- Questions for staff: valuation approach, contract template and obligations, monitoring schedule and fees, application timeline, and any city priorities or annual caps
Costs and timeline to expect
Plan for several months from application to a recorded contract, depending on staffing and hearing calendars. Up-front costs can include application fees and any consultant or architect work needed to prepare your Preservation Plan. You may also face immediate repairs if the plan identifies priority items.
Longer term, budget for ongoing maintenance that meets preservation standards, permit fees for reviewed work, and any monitoring or reporting fees. These obligations help ensure the public benefit of the tax relief.
Weighing benefits and responsibilities
The Mills Act can make ownership of a historic Kensington home more affordable by lowering property taxes. In return, you commit to higher maintenance standards, consistent preservation work, and a defined review process for significant changes. This tradeoff is attractive for many owners who value historic character and want a long-term stewardship path.
If you are considering an application, start with clarity on three points:
- Eligibility: Confirm the home’s designation status and integrity.
- Financials: Request a savings estimate from the assessor before you apply.
- Scope: Understand your Work Program so you can plan for materials, labor, and timing.
How The Clements Group helps
Buying or selling a historic home requires clear communication, strong documentation, and thoughtful timing. We help you navigate the process, coordinate with your lender and title team, and structure offers and disclosures so everyone understands the contract and obligations. For sellers, we bring a polished presentation and a concierge approach that highlights your home’s architectural value. For buyers, we provide practical guidance on timelines and the steps you can expect after closing.
If you want to explore historic opportunities in Kensington or nearby San Diego neighborhoods, we are here to help you move forward with confidence.
Ready to talk strategy for your historic home? Connect with The Clements Group to schedule a private consultation.
FAQs
Do Kensington homes need National Register listing to qualify for the Mills Act
- No, local designation by the City of San Diego or similar recognition is commonly sufficient, although National Register status can also qualify under many local programs.
Are owner-occupied single-family homes in Kensington eligible for Mills Act tax relief
- Yes, owner-occupied homes and income-producing historic properties can be eligible, subject to the City of San Diego’s program rules and priorities.
Will a Mills Act contract prevent me from remodeling my Kensington home
- Routine maintenance is generally allowed, but significant exterior changes usually require review and approval to ensure preservation standards are met; interior work often has fewer restrictions unless specified.
What happens to the Mills Act contract if I sell my Kensington property
- The contract typically transfers to the new owner, who assumes both the tax benefit and the preservation obligations, so disclose early and provide the recorded contract to buyers and their lenders.
How much could my property taxes drop under the Mills Act in San Diego
- There is no guaranteed percentage, because savings depend on the assessor’s valuation method and your property’s characteristics; request a parcel-specific estimate from the San Diego County Assessor.
Can the City of San Diego cancel a Mills Act contract on a Kensington home
- Contracts may include termination or enforcement provisions for limited conditions, often related to owner breach; the specifics are in the recorded contract and local implementing rules.
