The proposal is up for discussion at the council's Nov. 20 meeting after being recommended by the city Historic and Scenic Preservation Commission.
"We value these structures and we want these structures to be preserved and restored," said Oscar Orci, the city's development services director. "We want to give them incentive."
The Mills Act Program is a state-run initiative that gives local governments leeway to offer property tax incentives to "foster the preservation of residential neighborhoods and the revitalization of downtown commercial districts," according to the website of the California Office of Historic Preservation.
Historic building owners can potentially see property tax savings between 40 percent and 60 percent for a minimum of 10 years. These tax breaks remain intact even if the property is sold.
"That's the carrot, if you will," Orci said. "The purpose is to preserve the property."
The competition for these tax breaks - if the council approves the program - might be fierce.
Only five homes and two businesses are eligible each year, according to the commission's proposal, and the definition of a "historical" building, according to state statute, is broad.
Qualifying properties can range from places on California's historical register to single-family homes to commercial businesses anywhere in Redlands. However, according to Orci, for a residential home to qualify, it must be valued at less than $1 million.
The lost property tax revenue will dig into local government budgets. Details on just how much the city might sacrifice in revenue will be available Tuesday, Orci said.
Touted as a preservation tool, the program allows the city to offer strategic financial incentives to property owners whose houses need to be restored. The amount of the tax break and the terms are determined by a contract negotiated by the city and the property owner. However, the minimum contract period must be 10 years. Local authorities can impose penalties if the terms of the contract are not kept up, for example, if the building falls into disrepair.
The buildings that can qualify for the tax breaks include: a property listed on any federal, state, county, or city register, including the National Register of Historic Places, California Register of Historical Resources, California Historical Landmarks, State Points of Historical Interest and locally designated landmarks; owner-occupied family residences; and income-producing commercial properties.
The Historic and Scenic Preservation Committee made its recommendation on Thursday.