Three years ago, Congress passed the Tax Cuts and Jobs Act of 2017, which established that states can designate up to 25% of low-income or economically-distressed census tracts as “opportunity zones” — areas where certain investments, such as housing development and job creation, will provide tax advantages.
In 2018, the NC Opportunity Zones Program released the list of 252 locales certified for tax benefits by the Internal Revenue Service (IRS) + as of July 6, there were 15 opportunity zone funds (OZFs) affecting designated areas within our state. These funds aggregate investments for commercial real estate development, community revitalization efforts, multifamily residential construction, renewable energy sources, small business injection, and workforce housing.
Within the City of Raleigh alone, there are 10 census tracts which have been designated as opportunity zones, including areas around Capital Boulevard, New Bern Avenue, Western Avenue, Southeast Raleigh + the southern downtown gateway. Click here to view an interactive map. And what’s more, there are 27 additional opportunity zones around the Triangle.
Requirements:
- OZFs must invest 90% of assets into a qualified Opportunity Zone
- Capital gains must be reinvested in the OZF within 180 days and held for 10 years
- Click here to learn more about IRS requirements for investors
Benefits:
- Capital gains taxes are deferred for OZF investments
- Capital gains taxes will be waived for OZF investments held for 10 years
- Click here to learn more about tax advantages for investors
Additional reading:
- Opportunity zone development during the pandemic (Spectrum News)
- Triangle counties with the most opportunity zones (Triangle Business Journal)
- What you need to know about opportunity zones (Forbes)
Want to learn more about how opportunity zones work in our city? Raleigh Chamber + Innovate Raleigh are hosting a virtual forum this Thursday, August 6, from 9 to 11 a .m.
Speakers from around the community — including Jeanne Milliken Bonds from UNC’s Kenan-Flagler Business School + Napoleon Wallace from Partners in Equity — will share their thoughts on how opportunity zones improve social conditions and impact economic growth within these areas. Register here to attend.
