Investment firms have begun to set up funds to deploy money into opportunity zones, a host of areas designated by local governments that offer tax breaks under a new federal program, but not all properties within a qualified zone will experience the same benefit.
Opportunity zone investors have a number of factors to consider before putting money into a property, such as the likelihood of getting a solid return on investment, the ability to quickly navigate the project approval process and the other programs that can be utilized alongside the opportunity zone benefit.
The Opportunity Zone program, signed into law by President Donald Trump in December as part of the Tax Cuts and Jobs Act, allows investors to defer taxes on capital gains by putting them into funds that will invest into the areas designated by local governments. The industry is still awaiting specific regulations from the Treasury Department, but experts believe it will allow investors to see significant increases in returns while also benefiting communities that otherwise might not attract as much investment.
Develop founder Steve Glickman, who helped write the Opportunity Zone program while at the Economic Innovation Group, said the vision was to foster investment in low-income communities. But it was also important for local governments to select areas that could support private investment and create returns, and he said they did a good job of that. The census tracts selected cover 10% of the U.S. population, roughly 35 million people, and have an average poverty rate of about 30%.
Click here to read the rest of the article written by Jon Banister over at Bis Now