The New Community Development Program Opportunity Zone is a federal program. It was established by Congress in 2017 to encourage long term investments in economically distressed communities nationwide.
There are approximately 8,700 opportunity zones throughout the United States. The New York State is participating in the New Community Development Program Opportunity Zone program.
A law that arose from this opportunity zone program allows taxpayers to postpone taxes on profits from the sale of any property until 2026, on the condition that the profits from the sale are reinvested in an opportunity zone fund. This fund in turn invests the capital into businesses in a targeted community. Any gains that arise from investing in the fund are tax free only if the fund is held for 10 years.
In New York City, opportunity zones present investors with a way to reach higher returns by developing projects like affordable housing.
Lenders will be more likely to underwrite loans for these projects and areas because of the incentives and the program offers increased benefits to those who invest in these zones for at least 10 years.
Opportunity zones offer developers and investors a diverse collection of assets to invest in. From housing to offices and hotels, opportunity zones are poised to bring renewed growth across the city’s forgotten neighborhoods.
The Brooklyn neighborhoods where opportunity zones can be found are: Sunset Park, Bushwick, Bedford Stuyvesant, Crown Heights, Prospect Lefferts Gardens, East New York, Greenpoint, Williamsburg, Dumbo, Brownsville, Flatbush, Red Hook, Gowanus, Bay Ridge, Bath Beach, Bensonhurst, Borough Park, Coney Island, Brighton Beach, Cypress Hills and the Brooklyn Navy Yard.
Despite a big push from developers, accountants and law firms, investors are hesitating before jumping into opportunity zone funds according the wealth advisors.
To reap the entire tax benefit, investors have to buy into eligible projects by the end of 2019.
If you are interested in selling your property or you know someone who is planning to sell their Brooklyn New York property, whether a single family residential property, an apartment building, a commercial property, mixed use, multi family, coop or condo, vacant land or a development opportunity, call us. You will be very happy that you did.