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Mills Tax Act Encourages ‘Green’ Renovations

By lajollahomes | April 7, 2009

Important Historical Spanish Residence, Muirlands Drive, San Diego

Classic, timeless architecture is rare and highly sought-after in San Diego, not only for its beauty and ambience but sometimes for the vast tax advantages and environmentally-conscious satisfaction it can provide its owners. The Mills Act was enacted in 1972, allowing local governments to contract with homeowners to save historic homes from being razed in favor of new development by offering tax incentives to restore and preserve these homes. The tax advantages transfer to new homeowners when these properties change hands, creating an extremely appealing bonus to buyers in the market.“The Mills Act and the current attention towards environmentally conscious “Green” building coincide with one another due to the reuse of existing materials that takes place when a historic home is renovated,” explains Dan Grunow of Grunow Construction inLa Jolla. “Often the restoration of a historic home involves refurbishing existing materials in the home and giving them a second life rather than loading them into a truck to drop them in the city landfill.”

To qualify for Mills Act designation, a property must be at least 50 years old and represent an example of a specific architectural style or it must have been created by a notable builder or associated with a person of local, regional, or national historical importance. Tax savings are supposed to reach up to 60% though some property owners actually realize savings up to 90%; the County of San Diego uses a complicated formula to arrive at the total.  To see if your home qualifies, you can contact the San Diego Planning Department.

While many believe Mills Act designation prohibitively restricts their free choice in expanding or renovating their homes, it is not always the case. Grunow explains, “A historical home can receive entirely new electrical and mechanical systems, dual pane windows, and insulation in addition to being vastly expanded in size to create a highly efficient home that has the state-of-the-art comforts of new construction while maintaining the original aesthetics of the building.A historic, Mills Act designated Spanish residence in the Muirlands, for example, was more than doubled in size in 2005 while retaining its reduced tax status. While original wood in the house and patio bricks were painstakingly removed, restored, and replaced, a huge new addition added almost 4,000 square feet to the original residence to include state-of-the-art comforts including a fabulous pool, spa, and expansive outdoor patio areas. The original residence had three wood-burning fireplaces which have been restored and added to four others in the newer portion of the house along with a fantastic cooks’ kitchen which opens to a charming interior courtyard for convenient dining al fresco all year-round.

 “The cottages and historic homes we have renovated in the past have received far more recognition and appreciation than any of the high end luxury projects we have worked on,” says Grunow, “and those who choose to preserve historic homes reap the community’s appreciation for preserving the charming aesthetics of La Jolla.”

The Muirlands Drive Historical Spanish Estate pictured is offered at $7,200,000.

Please call Greg Noonan for more information about this extraordinary property. 1-800-LA JOLLA

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