The Mills Act difference: Tax savings in historic* Mar Vista
How much can you save in taxes if you buy a home in a historic overlay zone? Quite a bit, judging by the marketing of this restored midcentury home designed by architect Gregory Ain.
The Mar Vista house is listed at $1.1 million, but, according to marketing materials, "The house is protected under the Mills Act, which provides property tax
assessed value of $189,000."
Details, for those curious about the house: Three bedrooms, one bath, single-story at 3500 Beethoven St., one of 52 houses in a historic overlay zone. The overlay zone consists of tract homes Ain designed in 1948 on Beethoven, Moore and Meier streets between Palms and Marco in Mar Vista (see map).
Personally, I've always liked this neighborhood -- the single-story homes sit back nicely from Beethoven Street, and it's a quiet, tree-shaded block. But $1.1 million is a lot for homes in the 1,100-square foot range that were originally designed "to promote home ownership among modest-income families," according to the city's Office of Historic Resources.
*Yes, "Historic Mar Vista" is a joke.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo: 3500 Beethoven Street.Credit: L.A. Land
$5.00 is a lot for a gallon of fuel which is supposed to deliver cheap and efficent energy...can anyone tell me about something that is a good deal these days???? now that would be news.
Posted by: mike | July 21, 2008 at 02:53 PM
Are they nuts!?! $1000 a square foot for a tract house that is about 60 years old?
That is at least five times more than it is worth - easily.
Posted by: anonymous | July 21, 2008 at 03:10 PM
peter,
Did you cover peter hongs report in LATimes about a realtor couple in the desert/pal springs?
and the investigative work by ocrenter in his blog ?
http://bubbletracking.blogspot.com/
2008/07/we-all-seen-latest-dataquick-sales.html
Posted by: desi dude | July 21, 2008 at 03:10 PM
seems to reason that the tax savings would just be added to the asking price. this is the same effect that the morgage interest deduction has. you qualify for a morgage based on the payment an your income, so in the end, home prices are backed out from local incomes and the payment they can afford
Posted by: Stanley | July 21, 2008 at 03:11 PM
If you don’t mind:
(1) .. restore and rehabilitate the property to conform
to the rules and regulations of the Office of Historic Preservation...
(2) ..periodic examinations of the interior and exterior of
the premises by the assessor, the Department of Parks and Recreation,
and the State Board of Equalization as may be necessary to determine
the owner's compliance with the contract.
And a hefty breach of contract assessment if you don’t please the folks downtown.
No thanks. Homeowner’s associations are bad enough. Don’t need to give the government even more control over my life a tax break.
.
Posted by: TakeFive | July 21, 2008 at 03:11 PM
1.1 million? Gregory Ain must be rolling in his grave.
Posted by: toby | July 21, 2008 at 04:09 PM
I think Sam Zell wants us to create a new Lefty. Well that is Peter Hong and the LAT new mission it seems....
Remember- now is time to buy in metro LA ?-
Who volunteers for the job????
Lets say it all together : NOW IS TIME TO BUY IN METRO LA. Please drink my Koolaid, it has a new flavor, it is delicious, made special for you by Sam Zell !!!!!!!
Posted by: CD | July 21, 2008 at 05:09 PM
FYI, the equivalent price without Mill Act would be about $979k (11% lower). In other words, the interest and taxes on a $979k house without Mills Act are the same as I & T on this $1.1M Mills Act house.
So if you figure a similar non-pedigree house in the 'hood would be $800k, you could say the "Ain premium" at asking is about $179k.
* Assumes 6.5% mortgage rate, 1% property tax rate, and using the $189k Mill Act basis.
Posted by: tew | July 21, 2008 at 05:58 PM
Median Price (50th Percentile) down $1,000 this week. 25th Percentile down $650. 75th Percentile down $5,000.
The high-end is starting to crack.
Posted by: Fred | July 21, 2008 at 06:02 PM
Folks, the house adjacent to this Ain home on Moore at Palms sold for $250,000 more than the $1.25M asking price a year ago. True it is 700 sq ft larger and it has a pool. These are beautifully designed and landscaped mid-century homes that are indeed historic works of art right here in Mar Vista.
Posted by: Brad Neal | July 21, 2008 at 09:17 PM
Uhm, Brad, a year ago? Do you recall a thing called a real estate bubble? The bigger house with a pool is worth about 900,000 today (40% decline over peak). That's $500 a square foot - not a thousand!
Posted by: anonymous | July 22, 2008 at 09:48 AM
Anonymous, that house is a Gregory Ain it's a finite product and as such it is not subject to your crude generality. Hide behind your anonymity because you have much to learn.
Posted by: Brad Neal | July 22, 2008 at 07:19 PM