Opportunity Zones Are Still a Wise Investment

Are opportunity zones losing popularity? The short answer is no. Opportunity Zones are still a viable and unique real estate option that can diversify your portfolio, give you long-term tax benefits and help revitalize the community. Real estate investors have poured billions of dollars into economically distressed areas over the past five years, and these investments have created nearly 800,000 jobs.

Here, we’ll look at the basics of the Opportunity Zone tax incentive program and shine a light on why it’s still an attractive option for those looking to invest in real estate.

What Are Opportunity Zones?

The Qualified Opportunity Zone (QOZ) incentive program was established in 2017 as part of the Tax Cuts and Jobs Act (TCJA) to incentivize investment in low-income communities. There are thousands of Opportunity Zones across the U.S. in both urban and rural areas. Investing in these communities offers real estate developers a way to get tax benefits for their investment and future capital gains, while spurring economic growth and creating jobs in distressed neighborhoods. 

To participate in the QOZ program, taxpayers who acquire capital gains from another investment — stocks or property — invest those funds into a Qualified Opportunity Fund (QOF). As mentioned earlier, this investment comes with a number of tax benefits. By investing in a QOF, taxpayers can defer capital gains until Dec. 31, 2026, and if they hold onto that investment for at least 10 years, it is free from capital gains.

Is an Opportunity Zone the Right Move for Me?

As with any real estate investment, you should do your due diligence to ensure that investing in a QOF is the right move. There are many factors to consider, including the location of the Opportunity Zone and the type of real estate investment you’d like to make.

If you’re looking for ways to reduce your tax bill and help revitalize your community, seriously considering an investment in Opportunity Zones should be on your list.

Across the nation, real estate developers are using Opportunity Zones to improve the quality of life in economically distressed areas of their communities, whether it’s through affordable housing, much-needed medical facilities, or even office buildings.

Leading experts agree it’s a win-win strategy.

“Investing in Opportunity Zones allows investors to see the impact of their dollars on the ground,” said Nathan Kelly, President and Managing Director with Cushman & Wakefield | CRESCO Real Estate in Cleveland. “You’re not only benefiting financially, but you’re helping to improve the lives of people in the community who need it most.”

The Bottom Line

Opportunity Zones are here to stay and continue to be a popular option for real estate investors. The program offers tax benefits that can be highly beneficial for those looking to invest in low-income communities. With careful planning and due diligence, investing in Opportunity Zones can be a great way to add diversity to your portfolio while also giving back to the community.

If you have any questions about the OZ program, please contact Nathan Kelly today.