The federal Opportunity Zones program has drawn increasing interest — despite limited details on its rules — from real estate investors and developers who have launched funds to take advantage of the expected incentives.
Since the program was created late last year, the government has been promising more guidance.
The wait may soon be over. Greater details are expected to be released by month’s end, according to South Carolina Sen. Tim Scott, who helped push the program into President Trump’s tax overhaul plan. Bloomberg first reported the news.
The Opportunity Zones program provides tax incentives to developers and investors who invest in historically distressed neighborhoods throughout the U.S.
Though less than a year old, large institutional investors such as EJF Capital as well as RXR Realty have launched funds seeking to raise at least $500 million to invest in Opportunity Zones.
Scott said that total investment in Opportunity Zones could be up to $100 billion in the next couple of years, Bloomberg reported.
The proposed rules for the program have been moved to a division of the Office of Management and Budget, the final stop before the rules go to the IRS.
The OMB has held meetings over the rules, with discussions that have included allowing areas with no residents to qualify for the program.
Overall, investors have expressed interest in Opportunity Zones, but few developers have announced new large-scale projects in one of the 8,700 designated zones because of the uncertainty surrounding the program.
Some experts and attorneys warn that investors only have until the end of 2019 to take full advantage of the tax benefits of the program. [Bloomberg] — Keith Larsen