OPPORTUNITY ZONES

The latest buzz-word in real estate is Opportunity Zones. You’re going to hear a lot about it, and soon. It’s a Donald Trump initiative to encourage both job growth and revitalization in distressed markets. Our governor granted West Central Florida 108 zones, 50 within Hillsborough & Pinellas Counties. These “zones” are identified by census tracts. Let’s get in on it before word spreads!

HOW IT WORKS
Investors receive tax breaks by elimination of capital gains tax. Investors purchase existing commercial real estate, or vacant commercial land, hold it for 10 years, and upon sale, have no capital gain liability. It gets even better… an investor can sell a property, defer the capital gain from that property, and invest in an Opportunity Zone and ultimately, never pay the tax from the gain.

Normally, capital gains tax is 20%, sometimes 15%. If an owner sells a property of any type anywhere, and reinvests in the Opportunity Zone, they defer that capital gains tax. If they hold the new property for 10 years and sell, they eliminate the capital gains tax. Here’s the goal: Investors will purchase real estate in these depressed areas, and employ local residents to work in the businesses. Investors will flock to these zones, creating a demand for these properties, creating gentrification to the entire census tract.

ADDED BENEFIT

A 1031 Exchange is a “like kind” exchange, meaning the exchange of real estate for real estate. However in the opportunity zones, an investor can exchange business interests without real estate for real estate; can exchange partnership interests, or even newly issued stock, and avoid capital gains tax.

HOW TO GET STARTED

I know where the zones are, and I have the ability to locate specific property within these zones. Call me to discuss 813.493.2913.

Thomas Brubaker, Broker
TAM-BAY Commercial, Inc.