Opportunity Zones (OZ)


LeGrand Northcutt

Opportunity Zones are a federal economic development and community development tax benefit established as part of the 2017 Tax Cuts and Jobs Act available to investors with capital gains designed to encourage long-term private investment in low-income urban, suburban and rural census tracts.

The zones were nominated by each governor in the spring of 2018 and are comprised of low-income census tracts. Zones were eligible for nomination based on 2015 and 2016 American Community Survey data. Virginia had 901 eligible census tracts, and per the Tax and Jobs Act, each state was only able to nominate 25 percent or 212 tracts, and could have up to 5 percent or 11 as contiguous tracts. Virginia nominated the maximum number of census tracts allotted. The designations are permanent until Dec. 31, 2028.


Press Release -- Governor Northam Announces Federal Designation of 212 Qualified Opportunity Zones
Press Release -- Governor Northam announces nomination of 212 Opportunity Zones
Press Release -- Governor Northam Announces Initiative to Encourage Economic Growth in Virginia’s Opportunity Zones

How do Opportunity Zones Work

Taxpayers can get capital gains tax deferral for making timely equity investments in Opportunity funds that then deploy capital into Opportunity Zone business and real estate ventures. This is an economic and community development tax incentive that provides an avenue for investors to support distressed communities to address areas of the Commonwealth that have experienced uneven economic growth and recovery. The tax incentive offers three benefits; tax deferral, tax reduction through long-term investment, and exclusion of certain capital gains tax.