Opportunity Zones were added into the tax code by the “Tax Cuts and Jobs Act” to provide incentives for new investments in economically distressed communities. Opportunity Zones have been designated in all 50 states, DC and five US territories. There are 628 zones in Texas including 24 census tracts within Bexar County.
Last week the Treasury Department released the new rules for the program, which provide detail on how investors can receive full tax benefits. Taxpayers who reinvest capital gains from a previous sale into a fund for investing in QOZ are eligible to defer paying taxes on those gains, and can potentially reduce their tax liability by 10-15 percent. If held for at least ten years, any appreciation on it is tax-free.
Real estate professionals benefit on the back end as investors will be looking for real property and development opportunities for real estate. Click here to view a map of San Antonio area Qualified Opportunity Zones.
NAR will analyze the proposed rules and provide updated information at the 2019 Legislative Meetings in Washington DC.