We’ve posted a lot about Opportunity Zones because we believe they have tremendous potential. A recent article on Bloomberg Tax (who may have realized an important aspect of supply & demand) says that real estate investors are taking advantage of 2017’s tax overhaul’s opportunity zone tax breaks, but then they suggest that they’re “shooting themselves in the foot by propping up prices in already-hot urban markets.” That so-called rush is due to the fact that at least one essential Opportunity Zone tax law provision (regarding capital gains) expires at the end of 2019. Go figure?
“The end of 2019 marks a major deadline for investors seeking to use the 2017 tax law provision to shelter 15% of their profits from stocks and other investments, particularly from real estate, from taxes. In return for the tax break, they must hold their investments in mostly low-income opportunity zone census tracts for seven years, under tax code Section 1400Z-2.”