What are Opportunity Zones?
Opportunity zone properties and funds have been around since 2018, but little is known about them outside of well-informed real estate investors and real estate professionals. Opportunity zones are often celebrated for their ability to move billions of dollars in real estate development investment to low-income communities. Each state nominates blocks of low-income areas by census tract, which are then certified by the IRS and U.S. Treasury. Investors may then create and Opportunity Zone Fund. The fund is required to hold at least 90% of its assets in that qualifying Opportunity Zone area.
Don Honeycutt, ALC, Broker/Owner, Longhorn Realty, LLC says, “Investing in Opportunity Zones allows you to defer and even reduce the amount that would otherwise be owed on capital gains tax. Best of all, if held for 10 years, no tax is owed on the appreciation in value of the property.”
Opportunity Zones offer buyers tax incentives to invest in distressed areas. The purpose is to spur economic growth and job creation in distressed communities by providing tax benefits to real estate buyers in these areas.
Mr. Honeycutt currently has 12.9 acres of vacant land in an Opportunity Zone available in Belton, TX for $1,299,000. “For our listing and how it’s zoned by the city,” Mr. Honeycutt continues, “the following uses would be acceptable: retail, hotel, motel, car dealership, restaurant, multi-family, nursing home, hospital, community center, truck stop, etc.”
More than 30 million people across the country live and work in Opportunity Zones. Opportunity Zones cover downtown, industrial, suburban, and agricultural land areas.