Opportunity Zones (OZs) are designated U.S. census tracts where an investor can roll a capital gain into an Opportunity Fund, which invests at least 90% of its holdings in real estate inside a qualified zone. The fund defers and reduces the tax on that gain, and profits held in the fund for 10 years owe no tax.
OZs were created to boost economic activity in selected census tracts across the country. According to the Brookings Institution, there are 8700+ US Census Tracts designated as Opportunity Zones, of which 19% are in already gentrifying areas.
The tax reform bill added Opportunity Funds as a new way to incentivize investment in specific communities called Opportunity Zones (OZs). An OZ Fund is an investment vehicle that invests at least 90% of its holdings in real estate within a qualified OZ.
Opportunity Funds enable investors to defer federal taxes on recent capital gains until Dec 31, 2026, have that payment reduced by up to 15%, and pay as little as zero taxes on profits from an Opportunity Fund if that investment is held for 10 years.
of your capital gains until Dec 31, 2026
you owe by up to 15% after 7 years
on gains from an Opportunity Fund
“$6.1 trillion is the total estimated unrealized capital gains that both American households ($3.8 trillion) and American corporations ($2.3 trillion) hold. Out of which, most experts believe OZ Funds will redirect as much as $100 Billion dollars into these regions.”
Total # Of Opp Zones
Of US Population
Of US Tracts In List
We narrowly focus on investing in high-quality real estate in major US cities with long-term growth potential. We plan to take on massive value-add properties and new developments in Opportunity Zones to maximize cash flow and returns. OZ projects vary a great deal in quality; most OZs simply do not have the income, population or jobs to support new construction projects and a majority of OZ projects will not have positive outcomes for investors.
We specialize in the use of demographics and real estate data analytics to find and acquire only high-quality investments. We are specifically seeking out exceptional OZ projects by filtering markets, neighborhoods, and developer partners. Approximately 5-8% of all OZs are actually gentrifying neighborhoods with improving demographics; the rest are highly speculative and not investment-grade.
Opportunity Zones are designated U.S. census tracts created to boost economic activity. After you sell an asset such as stock, real estate or a partnership interest, you can roll that capital gain into an Opportunity Fund. The fund invests at least 90% of its holdings in real estate inside a qualified zone, and your gain gets special tax treatment: deferred, reduced, and tax-free on profits held in the fund for 10 years.
Hold an Opportunity Fund investment for 10 years and its basis steps up to market value when you sell, which leaves no taxable gain on the profits the fund earned. Shorter holds still count: at 5 years, 90% of the original capital gain is subject to tax, and at 7 years, 85% of it is taxed.
Quality varies enormously. Most Opportunity Zones do not have the income, population or jobs to support new construction, and a majority of OZ projects will not have positive outcomes for investors. Only about 5-8% of zones are gentrifying neighborhoods with improving demographics; the rest are highly speculative and not investment-grade. The tax break does not fix a bad project, which is why the market has to be filtered first.