Problem solved using a simple RC snubber circuit. Connected a 0.47uF X2 rated capacitor in series with a 100 ohm 5W resistor and connected them across the SPDT thermostat contacts (Active and Neutral) running to the second water tank. I didn't physically connect to the thermostat. I connected it across the terminal block. One side on active and other side on the neutral running to the second tank (tank thermostats switch the neutral not the active).