The development landscape is changing rapidly. With the rise of renewable energy projects and urban development initiatives, finding the right properties has never been more crucial. For developers, opportunity zones are a key strategy in maximizing the impact of their investments.
What are Opportunity Zones?
Opportunity Zones are economically distressed areas designated by the federal government to attract investment. Created under the 2017 Tax Cuts and Jobs Act, they offer federal tax benefits to investors willing to put money into long-term projects within these zones. The goal is to stimulate economic growth and job creation in underdeveloped areas.
How Are Opportunity Zones Chosen?
To qualify, a census tract must meet one of the specific criteria under the definition of “low-income community” in IRS Code Section 45D(e), primarily related to income levels and poverty rates. Most Opportunity Zones are areas with:
- At least a 20% poverty rate, or
- A median family income below 80% of the statewide or local area’s median.
Governors nominate eligible tracts, and the U.S. Department of Treasury certifies them. Today, there are over 8,700 designated Opportunity Zones across all 50 states, Washington, D.C., and U.S. territories.
Why Should Developers Care About Opportunity Zones?
For developers, the advantages of investing in Opportunity Zones are compelling:
- Tax Incentives: Investors can defer federal capital gains taxes on the invested gain amounts on prior gains when they reinvest in a Qualified Opportunity Fund (QOF) established with the IRS. If the investment is held for 5, 7, or 10 years, additional tax benefits apply, including partial exclusion of gains and permanent exclusion of gains if held for 10 years.
- Long-Term Growth: Opportunity Zones encourage long-term, stable development, which can lead to more resilient and sustainable communities.
- Renewable Energy Boost: Many Opportunity Zones overlap with rural areas suitable for renewable energy projects, making them ideal for solar, wind, or bioenergy developments. Federal incentives can often be combined with state and local grants, increasing the feasibility of green projects.
How to Start Finding Properties in Opportunity Zones
AcreValue’s new Opportunity Zones map layer makes it easy to identify properties within these zones. With just a few clicks, you can:
- See Opportunity Zones on a map: See where they are and what properties fall within their boundaries.
- Combine with other layers: Use AcreValue’s land cover, soil, or ownership layers to evaluate the potential for development.
- Make informed decisions: Save time and money by quickly narrowing your property search to those with the greatest tax incentives and growth potential.
See Opportunity Zones on the AcreValue Map
You can find qualified areas for Opportunity Zones on AcreValue. To activate those map layers, follow these steps:
- Log in to AcreValue: Ensure you are logged into your AcreValue account.
- Navigate to the map: Go to the map section of AcreValue.
- Open Map Layers menu: Locate the Map Layers menu at the top left corner of the map.
- Select Energy Tax Credit Areas: Within the Map Layers menu, find the option to display Energy Tax Credit Areas, and expand the dropdown.
- ~Select Opportunity Zones: Within the dropdown, find and select Opportunity Zones to see qualifying Opportunity Zone areas.
The Opportunity Zones map layer is available to users with a Premium or Enterprise subscription. Purchase a subscription here: Purchase AcreValue Premium.
