3 Benefits of Buying Property in Opportunity Zones
Even if you are not shopping in New Orleans, this information is a great place to start your journey into learning more about Opportunity Zones and their tax and profit benefits for you as an investor.
What are opportunity zones?
These are census tracts identified by federal and state government as being in need of economic development and improvement.
To motivate investment, both federal and state governing bodies offer tax incentives that are often attractive to investors.
“There are 150 census tracts in Louisiana that are qualified opportunity zones. The qualifying census tracks have already been designated and approved so they will not change for the foreseeable future.”(1)
How can they be used? - to save you money and make you money
Most investors choose a property in the zone that can be developed as a commercial space to bring in income. They essentially store some recently acquired capital (profit) from the sale of something else, to purchase and develop a business/ commercial space in the opportunity zone. (2)
Most investors who shop in Opportunity Zones do this for 2 reasons:
They avoid paying taxes on the invested funds
They can earn income from the property while they hold it.
At the close of 10 years, the asset should have gained value for a profitable resale and the investor owes no tax on the originally invested funds.
It is strongly advised that you work with an accountant that understands how to document these funds and their related transactions.
Below are links to learn more.
Or Get on my calendar to schedule your own consultation by Clicking HERE
First home Next home, Investment or Selling property - I am happy to answer your questions.
(1) Louisiana Opportunity Zones - by Louisiana Economic Development https://www.opportunitylouisiana.gov/business-incentives/opportunity-zones
(2) Some of the images and information was gathered here: Qualified Opportunity Zones: An Economic Developer’s Playbook https://www.opportunitylouisiana.gov/docs/default-source/default-document-library/led---qoz---ed-playbook---final-1.pdf?sfvrsn=d9ba505_0
(3) What is a 1031 Exchange? Know the Rules - https://www.investopedia.com/financial-edge/0110/10-things-to-know-about-1031-exchanges.aspx