The Qualified Opportunity Zones (QOZ) program, a federal incentive, was created to encourage real estate development and investment in designated low-income areas known as “Opportunity Zones.” These census tracts may receive funding from Qualified Opportunity Funds (QOFs), which allow a wide array of investors to pool their resources to rebuild distressed neighborhoods. Low-income areas will receive a much-needed injection of capital; developers and investors can receive deferred capital gains.
Census tracts qualify as Opportunity Zones if they have been nominated for that designation by the state; and if that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service. Each state has designated Qualified Opportunity Zones. These tracts must either be located within or be contiguous with a low-income community.