Quick Answer: The Mills Act is a California state law (not a city ordinance) that lets a city contract with the owner of a qualifying historic property to reduce the property’s assessed value using an income-based valuation formula instead of standard market comparables — in exchange for the owner committing to maintain and restore the property’s historic character. Pasadena and Glendale both participate, but through different local processes: Pasadena runs a competitive annual application window with a capped number of contracts; Glendale requires listing on its own historic register first, decided by City Council, with no published competitive cap.
What does a Mills Act contract actually do to a property tax bill?
It changes how the county assessor values the property — instead of comparing recent sales of similar homes, the assessor estimates the property’s income potential (like a rental income approach) and applies a state-set capitalization rate. Whether this produces meaningful savings depends heavily on the specific property: a recent buyer at a current market price is generally the one who benefits most, since a longtime owner with a very low existing assessed value (from Proposition 13 protections) may find the alternative valuation doesn’t actually lower their bill at all.
What qualifies a property in each city?
Both cities require the property to first carry some form of historic designation or listing — a local landmark or register listing, a National Register listing, or membership in a recognized historic district, depending on the specific criteria each city uses. The properties aren’t necessarily interchangeable between the two cities’ programs; a property that already carries a national or state-level historic listing has an easier path into either city’s local process than one that would need a brand-new local designation first.
How does Pasadena’s process work?
Pasadena generally opens an application window during a defined period each year, evaluates applications against each other (often prioritizing properties with a real planned restoration or rehabilitation scope), and awards a capped number of contracts for that cycle. Missing the annual window generally means waiting for the next one.
How does Glendale’s process work?
Glendale ties Mills Act eligibility to its own historic register, which requires City Council approval to join in the first place — a separate and often longer process than simply applying for the tax contract itself. Once listed on the register, an owner becomes eligible to apply for the tax contract, generally without the same kind of competitive annual cap Pasadena uses.
What is the owner actually committing to for the life of the contract?
A Mills Act contract generally runs for an initial minimum term (commonly a decade) that automatically renews each year unless someone gives formal notice to let it expire — meaning in practice the remaining term tends to stay roughly the same length indefinitely unless action is taken to end it. The owner typically commits to maintaining and, where applicable, actively restoring specific historic features, and the city generally reserves the right to periodically inspect the property to confirm compliance. Ending the agreement early, or falling out of compliance with its terms, can carry a significant financial penalty.
Related reading: Buying in a Glendale Historic District Overlay Zone and California Supplemental Property Tax Bill Explained.
Frequently Asked Questions
Does a Mills Act contract transfer to a new owner when the property sells?
Yes — it’s a recorded agreement that runs with the property, meaning a buyer takes on both the tax treatment and the maintenance/restoration obligations the previous owner agreed to.
Is there an income or property value cap to qualify?
Some cities apply an assessed-value ceiling for certain property types, with exceptions for specific categories of historically significant properties — this varies by city and is worth confirming for the specific program and property type.
Can a buyer apply for a Mills Act contract before closing on a purchase?
Generally, the application process requires the property owner’s signature and certification, so in practice the application typically belongs to whoever holds title at the time it’s filed — not something a buyer can complete in advance of closing.
What happens if I want to end the contract early?
This typically requires formal advance notice and, in many cases, involves a defined penalty if the contract is terminated outside the standard non-renewal process — worth understanding fully before entering into the agreement, not after.
General information about a state program administered differently by two cities, not tax or legal advice. Program rules, deadlines, and fees change annually — confirm current requirements directly with the relevant city’s historic preservation staff before relying on this for a purchase or listing decision.
About Will Flannigan
Will Flannigan is a California licensed real estate agent (DRE #01951292) and Certified Trust & Probate Specialist (CTPS) with The Nell Team at Equity Union Real Estate. A former attorney, Will brings a background in property management and over a dozen home flips to every transaction, and has been licensed since 2014. A 20+ year resident of Burbank Rancho, Will specializes in Burbank, Altadena, Pasadena, Glendale, and the greater San Gabriel Valley, with fluency in Mandarin serving clients in San Marino and beyond.
Buying or selling a historic home in Pasadena or Glendale? Whether a Mills Act contract helps or hurts depends on the specific property and the buyer’s tax basis — worth running the numbers early. Let’s talk.
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