New Disaster Tax Relief Law Brings Important Benefits for Property Owners and Real Estate Investors

Important tax relief updates for disaster-affected properties

Natural disasters can be devastating, especially for taxpayers who own property, commercial real estate, or multiple investment properties. Beyond physical damage and insurance claims, tax deadlines and IRS notices often add stress at the worst possible time.

The positive development is that a recently enacted federal law now offers meaningful tax relief to taxpayers affected by disasters.

What is the disaster related extension of Deadlines Act?

On December 26, 2025, President Trump signed the Disaster Related Extension of Deadlines Act (H.R. 1491) into law. The bill received unanimous bipartisan support in Congress.

The goal of the law is to give disaster victims more time and clearer communication when dealing with the IRS. This is especially important for real estate owners who may be juggling repairs, tenant issues, and cash-flow disruptions after a federally declared disaster.

Overview of key changes

1. More time to claim tax refunds and credits

Under prior tax law, disaster-related filing extensions did not automatically extend the time allowed to claim a refund or credit for overpaid taxes. This often worked against taxpayers.

Normally, the IRS allows taxpayers to claim a refund or credit:

• Within three years of filing a return, or
• Within two years of paying the tax

However, disaster extensions did not extend this “look-back” period, sometimes causing taxpayers to lose refunds simply because deadlines did not align.

New law: The new law amends the Internal Revenue Code so that any IRS filing extension related to a federally declared disaster also extends the time to file a refund or credit claim.

Why this matters for real estate owners:
If disaster-related losses, depreciation adjustments, or amended returns affect your tax liability, you now have additional time to recover money you are owed. This extended window gives you a better chance to recover money you are entitled to, which can be used to pay for repairs or help maintain your investment.

2. Clearer IRS collection notices after disasters

The law also fixes a major source of confusion and stress for disaster victims: IRS collection notices.

Previously, the IRS was required to send payment notices within 60 days of assessing tax, but those notices did not account for disaster-related relief periods. As a result, taxpayers often received letters warning of penalties or interest with deadlines that did not reflect their disaster extensions.

New law: The new law requires the IRS to ensure that collection notices sent to disaster victims reflect any postponed deadlines, preventing premature demands for payment.

Why this matters for property owners:
When disaster recovery already strains cash flow, this change helps avoid unnecessary penalties, confusion, and rushed payments while properties are being repaired or rebuilt.

What property owners should do next

If you own rental or investment property in an area impacted by a federally declared disaster, this law may directly affect your tax situation. You may have:

• More time to amend returns
• Additional opportunities to claim refunds or credits
• Protection from misleading IRS collection notices

Because disaster relief rules can vary by location and timing, it is important to review your specific situation with a tax professional. If you have questions about disaster-related tax extensions, casualty losses, or refund opportunities, contact your client service. Contact your Keiter Opportunity Advisor | Email | Call 804.747.0000 to discuss how this new law applies to your real estate holdings and ensure you are taking full advantage of the relief available.