In this post, we discuss Opportunity Zones, a tool that allows you to put your capital to work by investing in underserved areas in the United States. Keep reading to learn more.
Intro to Opportunity Zones and Commercial Real Estate
Qualified Opportunity Zones (QOZ) were created as part of the Tax Cuts and Jobs Act of 2017.
Simply put, Opportunity zones are low-income communities and neighboring areas where investments are incentivized by the U.S. government.
The process of creating Opportunity Zones unfolds in two phases. First, each state nominates communities (defined by population census tracts) to be designated as opportunity zones. Then the Department of the Treasury certifies that nomination.
You can invest in an opportunity zone through a Qualified Opportunity Fund (QOF), an entity that files either a partnership or corporate federal income tax return and holds at least 90% of its property within a Qualified Opportunity Zone.
A 2021 survey by the U.S. Government Accountability Office found that most Opportunity Zone projects are real-estate focused, such as multifamily housing and self-storage facilities.
The most important benefit of investing in Opportunity Zones is that it allows the investor to defer tax payments on capital gains from prior investments if they invest those gains in a Qualified Opportunity Fund within 180 days of the sale. They can defer the tax on those gains until the QOF is sold or December 31, 2026, whichever is earlier.
Opportunity Zones in Southern California
There are 8,764 Opportunity Zones in the United States.
Below is a list of counties in Southern California where you can find Opportunity zones. For a detailed list of opportunity zones complete with census tract numbers, just click on this link.
- Imperial (7)
- Kern (35)
- Los Angeles (274)
- Orange (27)
- Riverside (49)
- San Bernardino (57)
- San Diego (47)
- Santa Barbara (7)
- Ventura (8)
To learn more about opportunity zones, contact SoCal CRE Team: we’ll be happy to offer guidance and help you make sense of your options.
Disclaimer: This material is for general information and educational purposes only. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions.
SoCal CRE Team: Commercial Real Estate in Southern California
At SoCal CRE Team, we specialize in finding commercial real estate solutions for developers, investors, landlords, and tenants in the most sought-after Southern California markets such as Los Angeles, Orange County, Riverside, Anaheim, and more.