The Opportunity Zones program is seeing significant updates and proposed changes, primarily aimed at enhancing the benefits and refining the operational aspects of the program to foster more economic development in underserved communities.
A new bipartisan bill introduced in the U.S. House of Representatives is proposing to extend the tax deferral period for Opportunity Zones investments from 2026 to 2028. This extension aims to provide investors with additional time to reap tax benefits, such as the basis step-up incentives. Previously, investments made by December 31, 2021, could qualify for a 10% basis step-up, with the possibility of an additional 5% for investments held for seven years. The new bill also suggests expanding reporting requirements to enhance transparency, allowing investments in multiple funds (fund of funds), and disqualifying high-income Opportunity Zones while providing states the option to designate a new zone
Further, the legislation intends to address concerns about certain zones, like Buick City in Flint, Michigan, that were initially overlooked. These improvements are part of an ongoing effort to ensure that the program can better serve targeted communities while also addressing industrial site revitalization
For more detailed insights into the legislative updates and their implications on real estate and other business investments within Opportunity Zones, you can refer to comprehensive resources and analyses provided by OpportunityDb and Novogradac. These updates reflect the evolving nature of the program and its role in enhancing community development through strategic investments.
Further reading can be found on our blog https://bostonrealestateinvestorsassociation.com/opportunity-zones/