HOUSTON – (By Dale King, Realty News Report) – Three months after Hurricane Harvey struck, first responders were still assessing the scale of devastation: millions of people affected, thousands of homes and businesses damaged or destroyed, and possessions lost to unprecedented flooding. Harvey delivered more than 50 inches of rain in some areas, leaving lasting physical and financial consequences across the region. In response, Patrick O’Connor, president of O’Connor and Associates, a Houston-based tax consulting firm, has introduced a Federal Tax Refund Program. The program gives homeowners and business owners a legal pathway to pursue additional federal tax relief by amending their 2016 federal returns or adjusting figures for their 2017 filings to reflect hurricane- and flood-related losses.
Realty News Report asked O’Connor to explain how the program works and how it can help property owners recover.
Realty News Report: Looking at the Houston-area real estate market overall, how will Hurricane Harvey affect it going forward?
Patrick O’Connor: Harvey was a Category 4 storm on the Saffir-Simpson scale, but the primary damage in Houston came from intense rainfall and flooding rather than wind. Historically, floods tend to cause more widespread property destruction and higher fatality numbers than many other natural hazards. State estimates put Harvey’s total toll as high as $180 billion. Locally, roughly 100,000 homes and between 10,000 and 30,000 apartments were flooded. At one point, about 50,000 people were housed in 20,000 hotel rooms funded by FEMA.
Realty News Report: What should property owners do if their property flooded?
Patrick O’Connor: Property owners who experienced flood damage from Hurricane Harvey may qualify for a federal tax refund through casualty loss deductions. The first step is to notify your local appraisal district that your home or business flooded. Document the condition of the property now and at year’s end; collect photos, contractor bids, invoices for repairs, and any records of previous flooding. Submit this documentation to the appraisal district. If you don’t report the flooding, the initial 2018 tax assessment will likely treat the property as undamaged. Because appraisal districts tend to be conservative, you should obtain a market-value appraisal for the property as of January 1, 2018, with a detailed analysis showing the reduction in value tied to the reported flood status. This appraisal will support any claim that the property’s market value declined due to the flooding.
Realty News Report: How does the Federal Tax Refund Program help flood victims?
Patrick O’Connor: The program leverages federally allowed casualty loss deductions to accelerate meaningful federal income tax refunds for eligible victims of flooding. By substantiating the property’s diminution in value and filing the appropriate amended returns or adjustments, qualified taxpayers can secure refunds that offset some of their losses.
Realty News Report: What kind of savings can residential property owners expect?
Patrick O’Connor: Residential owners who suffered flood-related declines in market value may be eligible for substantial casualty loss deductions—commonly ranging between 10% and 30% of the pre-flood property value, depending on the case. For example, if a home was worth $300,000 before Harvey and $235,000 after (excluding direct physical repair costs), the resulting $65,000 casualty loss could generate approximately $29,000 in federal tax savings at a 45% effective tax rate. In that scenario, an independent appraisal fee of $650 represented about 2% of the tax savings.
Realty News Report: How does this apply to commercial properties?
Patrick O’Connor: The same principles apply to commercial real estate. For instance, a commercial property valued at $6.5 million before Harvey and $5.1 million afterward would show a $1.4 million casualty loss. At a 45% tax rate, that could translate into roughly $630,000 in federal tax savings. In that example, an appraisal fee of $7,500 equated to about 1% of the tax savings.
Realty News Report: If a property owner already received full payment from flood insurance, can they still participate in the program?
Patrick O’Connor: Yes. Even when flood insurance has covered physical repair costs, owners can still pursue tax relief related to diminished property value. The Hurricane Harvey Federal Tax Reduction Program is designed to help reduce both property taxes and federal income taxes for those affected by the disaster.
Realty News Report: Is the program limited to natural disasters?
Patrick O’Connor: No. The program applies to sudden, unexpected incidents—natural or man-made. For example, qualifying events could include catastrophic natural disasters and other abrupt, unanticipated incidents that result in measurable property losses.
Realty News Report: Can this program be used outside Texas?
Patrick O’Connor: Yes. The federal rules governing casualty loss deductions apply nationwide. Property owners in any state affected by a qualifying disaster can pursue similar claims. In Texas, O’Connor mentioned active work in many counties affected by Harvey, including Aransas, Austin, Bastrop, Bee, Brazoria, Calhoun, Chambers, Colorado, DeWitt, Fayette, Fort Bend, Galveston, Goliad, Gonzales, Hardin, Harris, Jackson, Jasper, Jefferson, Karnes, Kleberg, Lavaca, Lee, Liberty, Matagorda, Montgomery, Newton, Nueces, Orange, Polk, Refugio, Sabine, San Jacinto, San Patricio, Tyler, Victoria, Waller, Walker and Wharton.
Realty News Report: What level of expertise is required to apply for the tax refund?
Patrick O’Connor: Any qualified tax professional can prepare the necessary filings, and technically a knowledgeable taxpayer can prepare an amended return themselves using Form 1040-X. O’Connor noted strong early interest in the program: roughly 4,000 people signed up with his firm in the first six weeks, even before active marketing began.
Realty News Report: Tell us about your firm.
Patrick O’Connor: O’Connor and Associates has been in business since 1974. The firm’s team includes specialists in property tax, cost segregation, and commercial and residential real estate appraisals. Over the years the company reports having served more than 100,000 clients and achieved total tax savings exceeding $500 million. O’Connor and Associates’ experts have been featured and quoted in national media outlets and industry publications.