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Investing in Opportunity Zones
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Investing in Opportunity Zones

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07 Jan Investing in Opportunity Zones

Posted at 09:05h in Business by

Over the last decade, economic growth has been wildly inconsistent across the United States. While stock markets continue to rise higher than ever before, new business formation is at its lowest point in recent history, with hubs such as New York and California being the main drivers of growth. However, with the passing of the Tax Cuts and Jobs Act, a new opportunity has appeared for bold investors to reinvigorate struggling businesses while also increasing their own dividends: The newly-created Opportunity Zones.

What is an Opportunity Zone?

Created in the Tax Cuts and Jobs Act of 2017, Opportunity Zones are tracts of neighborhoods across all states and territories that are designed for capital investment. For a community to be labeled as an Opportunity Zone, it must be economically diminished, with a poverty rate higher than 20% and a family income no more than 80% of the median income of the state. This concept is especially common in New York State, with 514 census tracts recommended for designation as Opportunity Zones.

Benefits of Opportunity Zone Investment

More than 100 legislators across all branches of government supported the Opportunity Zone Investment program with the goal of rapidly increasing investments for struggling communities. Because of this, many benefits and advantages exist for investors who take part in the program. By supporting the community through investments in Qualified Opportunity Funds, individuals are entitled to:

  • Deferred Capital Gains Tax until April 2027
  • A 10% decrease on taxes for investments maintained after 5 years, which decreases to 15% after 7 years
  • Investments held for more than 10 years qualify for exclusion from some taxes

 

Opportunity Zones help support communities and revive once-thriving industries, as well as protect your investment portfolio and return great dividends for patient investors.

For title insurance services on your Opportunity Zone purchase, give Town Title Agency a call today at 201-996-1095 or send us an email at mailbox@towntitle.us.