Tax credits for disaster-proofing homes and businesses in disaster zones
S. 3497 — Shelter Act · Filed by Michael Bennet (D-CO) · 1 cosponsor · Introduced Dec 16, 2025 · Referred to committee
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What it does
The Shelter Act creates two new tax credits to incentivize homeowners and businesses to invest in disaster-mitigation improvements: a 25% personal credit (up to $3,750/year, $7,500 joint; $15,000 lifetime per home) for residential retrofits like reinforced roofs, flood barriers, and fire-resistant materials, and a 25% business credit (up to $5,000/year) for similar improvements to commercial properties. Both credits apply only to properties in federally declared disaster areas or those receiving FEMA mitigation assistance, and phase out at higher incomes ($100k+ for individuals, $5M+ for businesses).
Why we flagged it
The bill's core mechanism is a straightforward tax credit designed to reduce the after-tax cost of disaster-mitigation property improvements. It is functionally a subsidy for resilience spending, not a regulatory change or carve-out.
What the text implies
- The credit may disproportionately benefit higher-income homeowners who have sufficient tax liability to claim it and can afford upfront mitigation costs; lower-income households in disaster zones may lack the capital to invest even with a 25% credit.
- By tying eligibility to FEMA disaster declarations and mitigation assistance, the bill creates incentives for property owners to seek federal aid, potentially increasing demand on FEMA resources.
The full analysis lists 5 implications of this text.
Who stands to gain
residential property owners in disaster-prone areas; small to mid-market commercial real estate operators; construction and retrofit contractors serving disaster-mitigation market