The thrust of the new legislation is to unlock millions of dollars of investments now being held and then incentivize investors to reinvest in distressed areas designated by the U.S. Department of the Treasury as Opportunity Zones. This is achieved via a temporary capital gain tax deferral, in combination with other incentives, channeling direct investment into low-income urban and rural communities.
Other key measures promoting investor participation include:
- A new way for investors to pool resources through “Opportunity Funds” that have been established specifically for investments in these designated areas,
- A concentration of capital into the Opportunity Zones designated by the Governor, and
- Encouraging long term investor commitment by offering incentives tied to longevity.
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