Some properties in California qualify for special property tax programs that limit how they are assessed. These programs are designed to support agriculture, conservation, historic preservation, and sustainable land management. If your property participates in one of these programs, it may receive a reduced assessment based on its restricted use rather than its full market value.

The most common programs include Timber Production, Williamson Act, and Mills Act properties.

Timberland Production Zone (TPZ) Assessment

Properties zoned Timberland Production Zone (TPZ) receive a special method of assessment under California's Timberland Productivity Act of 1976. TPZ zoning is a requirement to qualify for this special assessment.

Rather than being assessed at market value like most properties, TPZ land is valued based on its productivity as timberland, which typically results in a significantly lower assessed value.

How TPZ Land Is Assessed

The assessed value of TPZ properties are made up of two components:

  • Timber productivity value — a per-acre value set annually by the California State Board of Equalization under Revenue and Taxation Code §434.5. In Santa Cruz County, all TPZ land is classified as Redwood Region III, which determines the applicable per-acre rate.
  • Compatible use value — if the land is also used for an activity that doesn't conflict with timber production — such as grazing or recreation — the value of that compatible use is added to the assessment.

Structures and Improvements

Any structures on a TPZ property — along with the land directly associated with those structures — are assessed separately under standard Proposition 13 rules, just like any other real property. Structures do not benefit from the special TPZ valuation method.

The California Land Conservation Act of 1965, commonly known as the Williamson Act, allows eligible property owners to enter into a voluntary contract with the County of Santa Cruz to preserve commercial agricultural land in exchange for reduced property taxes.

Being under a Williamson Act contract is a requirement to qualify for this special method of assessment.

How Williamson Act Land Is Assessed

For properties under contract, the Assessor's Office values the land annually at the lowest of three calculations:

  • Proposition 13 value — the inflation-adjusted base year value established under Proposition 13
  • Fair market value — what the property would sell for on the open market
  • Restricted value — an income-based calculation reflecting the land's agricultural potential, determined by its land classification and the type of farming or agricultural use it could support

Using the lowest of these three values typically results in a significantly reduced assessed value compared to standard market-based assessment.

Structures, Improvements, and Compatible Use Areas

Structures on a Williamson Act property — along with any land directly associated with those structures - are assessed separately at full value under standard Proposition 13 rules, just like any other real property. They do not benefit from the special Williamson Act valuation.

Current Moratorium on New Contracts

There is currently a moratorium on new Williamson Act contracts in Santa Cruz County. As directed by the Board of Supervisors, the County will maintain the program for existing contracts only and will not accept applications for new contracts until the State resumes making subvention payments.

If your property is already under contract, your assessment will continue to be calculated annually as described above.

Mills Act Properties

The Mills Act provides a property tax incentive for the preservation and restoration of historic properties. In Santa Cruz County, the Mills Act is available for properties in unincorporated county areas, effective January 1, 2026.

Being under a Mills Act contract is a requirement to qualify for this special method of assessment. To be eligible, a property must be listed on a local historic register or formally designated as historically significant.

In return for the tax benefit, property owners commit to maintaining, restoring, and preserving the historic features of their property in accordance with their contract with the County.

How Mills Act Properties Are Assessed

For properties under contract, the Assessor's Office values the property annually at the lowest of three calculations:

  • Proposition 13 value — the inflation-adjusted base year value established under Proposition 13
  • Fair market value — what the property would sell for on the open market
  • Mills Act restricted value — an income-based calculation that estimates the property's value based on the rental income it could reasonably generate as a historic property

Using the lowest of these three values typically results in a significantly reduced assessed value compared to standard market-based assessment.

Structures, Improvements, and Non-Historic Areas

Any structures, improvements, or portions of land on a Mills Act property that are not part of the historic designation — including non-historic buildings or land beyond that reasonably associated with the historic structure — are assessed separately at full value under standard Proposition 13 rules, just like any other real property. They do not benefit from the special Mills Act valuation.

More Information

For more information or to apply for the Mills Act, please visit: Community Development and Infrastructure’s Mills Act webpage:

Mills Act Program