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City council approves historic home property tax reductions

The San Diego City Council Tuesday approved changes to the city’s management of a state program offering property tax reductions to owners of historic homes.

California’s Mills Act established a program that lowers property taxes by up to 70 percent on historic homes to encourage owners to rehabilitate and maintain their properties.

The City Council raised the “threshold’’ of property tax revenue lost annually by the city due to the program to $200,000. They also voted to increase the fee for applicants already in the pipeline to $500.

To help recoup costs incurred by the city from the program, Mayor Jerry Sanders had sought a lower threshold of $100,000 in lost property taxes. Sanders also wanted a higher increase in the fees assessed people who’ve already submitted applications to $2,267.

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Councilwoman Toni Atkins said the action taken by the City Council was a “fair approach’’ to preserving historic homes.

“These resources (historic homes) are an asset to our city,’' Atkins said. “This is what makes San Diego, and many of our communities, special.’'

The meeting was a continuation of a discussion on the Mills Act begun by the City Council late last month.

During that hearing, the City Council agreed to increase fees for property owners who apply to the program and to improve the inspection process to ensure historic homes are being maintained.

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Sanders sought the changes to the way the city manages the Mills Act after a grand jury report chided San Diego for lax oversight and allowing too many homes into the program.

The report found that San Diego leads the state in designating buildings as historic, resulting in an annual loss in property taxes of more than $600,000.