Opportunity Zones

Opportunity zones are designed to incentivize investment and economic development in underserved communities. Established as part of the Tax Cuts and Jobs Act of 2017, developers may use a Qualified Opportunity Fund (QOF) to help fund projects located within an opportunity zone. This new source of investment dollars could prove to be a powerful economic tool if properly administered.

Under the statute, investors can create a QOF that would allow them to realize significant tax savings, as long as 90% of the fund’s assets are invested in qualified property and businesses within an opportunity zone.

The law allows investors to defer federal taxes on any capital gains income invested in a QOF. Additional tax benefits are provided for long-term investors.

However, these tax benefits are time-constrained. The deferral expires Dec. 31, 2026, requiring investors at that point to pay taxes on any deferred gains still invested in a QOF.

Resources

More information on opportunity zones can be found in these NAHB resources and blog posts:

You can also learn more at these government links:

IBS Education Session

At the 2019 International Builders’ Show in Las Vegas, NAHB will be hosting the education session How Builders & Developers Can Use the New ‘Opportunity Zone’ Tax Incentive Program from 8:30-9:30 a.m. on Wednesday, Feb. 20.

NAHB is providing this information for general information only. This information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action on this information, you should consult a qualified professional adviser to whom you have provided all of the facts applicable to your particular situation or question. None of this tax information is intended to be used nor can it be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

Contacts

David Logan
202-266-8448
dlogan@nahb.org
J.P. Delmore
800-368-5242 x8412
jdelmore@nahb.org