A hallmark of the Tax Cuts and Jobs Act passed in 2017 was the creation of Opportunity Zones. In short, the program was another effort to encourage investment in economically depressed communities around the country. And true to the current state of politics in the country, both cheerleaders and critics were quick to voice their opinions.
In 2018, Florida joined the list of states eager to participate in the program. The candidate neighborhoods, identified as census tracts, represent counties throughout the state but South Florida leads the pack in the number of communities in need of investment. Nevertheless, nearly two years after its passage, Opportunity Zones (OZ) remain a highly debated topic.
The basis of the program is to promote economic investment while offering a tax break incentive. In short, when taxpayers sell an appreciated asset, they can then invest that gain in governor-nominated census tracts. Some key details:
Naturally, there are pluses and minuses – philosophical and economic – to investing in Opportunity Zones. For investors, it’s a tax incentive that also holds the potential to do good: reduce poverty, increase employment, and spur growth in some of the poorest communities in the nation. In fact, of the top 10 cities predicted to benefit the most from the Opportunity Zones program, five are in Florida: Orlando (1), West Palm Beach (2), Tampa (3), Fort Lauderdale (8), and Miami (10).
Critics, on the other hand, say, “not so fast.” Some point to previous programs that they say failed in the long run, as well as the number of people who would be displaced as a result of living in an Opportunity Zone and the convergence of investments in neighborhoods that were already seeing a surge in investments prior to the start of the new law.
Even in the midst of the debate, though, opportunities are there – but for the investor, the best advice is to proceed with caution, for some very good reasons:
Morris Southeast Group is excited about the possibilities found in Opportunity Zones throughout the region – especially when one of these investments is researched thoroughly and represents the right move for one of our clients. To learn more about property investment opportunities, and/or other services, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at firstname.lastname@example.org.