Industry Experts Discuss Possibility of Opportunity Zones Extension

What potential changes might be coming for the Opportunity Zone program? We shared some of the industry experts’ thoughts on this in an earlier blog post, which you can read here. 

Since then, more discussions have taken place, particularly regarding the extension. Here are the highlights: 

• Michael Novogradac and Peter Lawrence, Novogradac’s Managing Partner and Director of Public Policy & Government Relations, respectively, discussed the potential for the OZ legislation extension during their Tax Credit Tuesday podcast on November 12th. Lawrence shared his confidence that “we'll certainly get an extension and some sort of robust renewal of the incentive going forward, included in the legislation.”
  
  
• Jimmy Atkinson, founder of Opportunityzones.com hosted a webinar last week discussing what may be coming next for Opportunity Zones. He talked about the proposed legislation aimed to extend the current OZ policy by two years, hence "extending the tax incentive for two years by pushing the deferral date from 2026 to 2028”; furthermore, he shared that there is currently “strong momentum for extending the program and introducing reforms to increase its accessibility and impact”. Jimmy concluded by saying that the “key developments are anticipated in 2025 during budget reconciliation”.
  
  
• Bloomberg also published an article discussing the potential boost for extensions and shared what the OZ Working Group recommended in a letter to Rep. Mike Kelly (R-Pa.) (who introduced legislation H.R. 5761 in 2023) last month:
  
  “The working group proposed adding incentives for what it calls “impact investments” and suggested a bigger tax break—up to 100% of the original investment—based on a project’s benefit to its local community. The letter also laid out the challenges rural areas face in attracting investment and backed a bill (H.R. 3906) to expand rural opportunity zones, which has been stalled in the House Ways and Means Committee since June 7, 2023.
  
  The group also proposed legislative changes to improve how opportunity zones interact with other incentives—like the new markets tax credit, historic tax credit, and low-income housing tax credit— ”which are even more effective” when combined.”

The potential for the extension, combined with key tax benefits of investing in OZs, as well as the increasing demand for Build-To-Rent communities, present an attractive opportunity for investors. 

Learn more about our BTR OZ Fund here and contact us today if you have any questions.

Past performance of Pinnacle Partners OZ Funds is not indicative of future results. There can be no assurance that the fund’s objectives will be achieved or that cash distributions will, in fact, be made or, if made, whether those distributions will be made when or in the amount anticipated or that certain tax benefits will be available to investors. An investment in the fund is illiquid, speculative, and will involve significant risks. It is only offered to suitable and qualified investors. Full details about the fund and its associated risks can be found in the fund offering documents. 

Nothing in this blog post should be construed as tax advice.  Please confer with your tax adviser to determine if an investment in an OZ fund is right for you.