Catch the Rain: Rain Barrels, Rebates and a Tax Break Most People Miss

I collect rainwater at my own home. It is one of the simplest things a San Diego homeowner can do, it costs very little after rebates, and most of my neighbors are still letting every drop run down the gutter and into the street.

With the rainy season about to start, now is the time to set it up.

How much water your roof can catch

The math is simple. Every inch of rain on 1,000 square feet of roof produces about 620 gallons of water.

San Diego averages roughly 10 inches of rain a year. A typical 1,500-square-foot roof sees thousands of gallons run off it every winter. One good storm can fill a 55-gallon barrel many times over. That is free, chlorine-free water your plants actually prefer.

What you need

  1. A barrel or cistern of at least 50 gallons, sold as a complete unit, with a sealed lid.

  2. A downspout diverter to send roof water into the barrel.

  3. An overflow that directs extra water away from your foundation, ideally into a planted area.

  4. Mosquito protection. Screens on every opening. Standing water is the one real downside, so seal it well.

  5. A solid, level base at least 6 inches off the ground, which also gives you room to fill a watering can.

Tall cisterns should be strapped to the house. In earthquake country, that is not optional.

The rebates

You can get paid for this. Two programs cover San Diego County:

  • City of San Diego water customers: $1.50 per gallon of storage, up to $800 per property, through the city's rain barrel and cistern rebate. A 55-gallon barrel earns about $82. Renters qualify. Take a photo of the spot before you install, keep your receipt, and apply after installation.

  • SoCal Water$mart (most of the county): $35 per rain barrel, up to two, or $250 to $350 for a larger cistern.

Funding is first come, first served, and the rules differ by program. Check with the water agency on your bill before you buy.

The tax break most people miss

There is no tax credit for rain barrels. There is something better for homeowners who go bigger.

In 2018, California voters approved Proposition 72. Under the law that implements it, adding a rainwater capture system to your home does not count as new construction for property tax purposes. A cistern system will not increase your assessed value. You must file a claim with the County Assessor, and the exclusion currently applies to systems completed before January 1, 2029.

On the federal side, the IRS generally treats water conservation rebates as income. A bill to exclude them has been introduced in Congress but has not become law. For a $35 or $82 rebate, this rarely matters, but ask your tax professional if you are claiming a large cistern rebate.

Is it legal?

Yes. California law allows homeowners to capture rainwater from their roofs for use on their property. If you are in an HOA, check whether your association has rules on placement or appearance.

Bottom line

A rain barrel will not replace your water bill, and I will not pretend it does. It does put free water on your garden every winter, slows runoff into the ocean, and with the rebates it often pays for itself. If you planted this fall, it is the natural next step.

Have a question about your yard or your home? Send me a note.

Sources:

Bassem Elsayeh
REALTOR® | REeBroker Group | CA DRE #01901933

This post is general information, not tax or legal advice. Consult a tax professional about your situation.

Next
Next

Fall is San Diego's real planting season