Thanks everybody contributed to the discussion. I actually called the County Assessor with the question about the transferability and the value of Mills Act deduction and (surprise!) got a very detailed and positive answer.
Each house with Mill’s Act has so called Mill’s value which is 25-70% of its market value. This value is used to compute the property tax. The 2 important facts I learned from the Assessor about Mill’s value are:
(a) The Mill’s value (and related property tax) do NOT depend on the sale value of the house. If the house is sold for $800,000 or $1,200,000 the property tax is going to be the same as it has been before the sale.
(b) The only 2 things which can affect the Mill’s value are if the house is not the primary residence or/and if you build an addition. In the latter case, the value will be reassessed as it has been with the property I am interested in. But even in this case, the increase in Mill’s value was maybe 25% of the market value of the addition. For example, if the house before the addition would sell for $600,000 and after addition for $1,000,000 (making the market value of the addition to be $400,000), the Mill’s value may go up by $100,000.
bearishgurl, you are right about the owner trying to sell for 10-15% above the marker price suggested by comps.
Thanks again.
