The most simple explanation of the Opportunity Zone is this, it is an area, or a piece of land, or a district within a country where the powers that be would like for people to create more opportunities for the population in that area.
Opportunity Zones are not just located in the United States of America. There are several different countries where their governments have chosen designated areas as opportunity zones.
We are fortunate to have several here in Florida, and I am the listing agent for one of them. It is our listing at Hibiscus Airport in Vero Beach. As you will notice below, the offer actually consists of three separate parcels which are being sold as one unit.
|98th Ave, Vero Beach, FL||Land||40.29||1,755,032||N/A|
|12th St, Vero Beach, FL||Land||19.58||852,905||N/A|
|1890 98th Ave, Vero Beach, FL||Land||16.69||727,016||N/A|
From the IRS.GOV Site:
Q. What is an Opportunity Zone?
A. An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service.
Q. How is an Opportunity Zone created?
A. Opportunity Zones were added to the tax code by the Tax Cuts and Jobs Act on December 22, 2017.
Q. How do Opportunity Zones spur economic development?
A. Opportunity Zones are designed to spur economic development by providing tax benefits to investors. First, investors can defer tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026. If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain. If held for more than 7 years, the 10% becomes 15%. Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.”
This listing contains an Airport with a grass runway and two hangars. It can remain and airport of you wish, and the remainder of this parcel and the two adjoining parcels could be used for commercial development.
Why Should you care?
If you choose to build on those commercial plots of land, you can be certain that you will have those tax advantages mentioned above to defer profits you make should you, at some point, decide to sell the buildings and the land.
There is an opportunity to help the community, to increase employement in Indian River County, and to keep money in your pocket. Those are just some of the reasons why you might care about developing a commercial enterprise in our opportunity zone.
I would love to talk more about this if you are interested.