To raise awareness of the Opportunity Zone program, the New Jersey Department of Community Affairs has launched a new web portal, opportunityzones.nj.gov. The website is intended to be a resource for developers, investors, stakeholders, residents and local governments.
Opportunity Zone Program
As discussed in greater depth here, the Opportunity Zones program was initiated under the 2017 federal Tax Cuts and Jobs Act. The federal tax incentive program aims to attract long-term capital investments into low-income rural and urban communities. In New Jersey, 169 zones were designated.
While the program has various features, a key element under the Opportunity Zone program is that private investors participating in the program can defer paying federal taxes on capital gains reinvested in Qualified Opportunity Funds that invest in certain designated low-income communities (designated Opportunity Zones). Certain reinvested capital gains are deferred, generally, from taxation until exit from a Qualified Opportunity Fund or December 31, 2026, whichever comes first. As a further benefit, holding the original gains reinvested in Qualified Opportunity Fund investments for several years could potentially also result in reduced rates, with taxable gains discounted by ten percent after being held for five years and by an additional five percent after being held for seven years. In addition, qualified gains from Qualified Opportunity Fund investments held for at least 10 years are excluded from the capital gains tax.
NJ Opportunity Zone Navigator
For businesses, New Jersey’s new Opportunity Zone website includes links to the federal rules, guidelines issued by the U.S. Department of the Treasury, and the IRS responses to frequently asked questions. Residents and stakeholders will also find a list of resources tailored to them, including frequently asked questions about the Opportunity Zone program and how it works.
The main feature of the Opportunity Zone website is a new user-friendly interactive mapping tool, which the DCA calls the NJ Opportunity Zone Navigator (Navigator). The Navigator displays where the zones are in the state’s 21 counties and their unique characteristics. When users click on a zone, they will see an overview of its demographic makeup, and they can drill down further to view a more detailed demographic profile.
“The Opportunity Zone Navigator gives invaluable insight to investors, businesses, and local governments. The tool provides a quick view of the zones with overlapping layers of complexity,” Lieutenant Governor Sheila Y. Oliver, Commissioner of the DCA, said in a press statement. “The one-stop shop and Navigator provide the missing link needed to connect municipalities with the right investors. At the end of the day, it’s about investing in our communities.”
The map has more than 30 layers of data, some of which can be seen at the parcel level. For instance, users can view community assets in each zone such as train stations, bus terminals, airports, colleges and universities, power grids, ports and marinas, hospitals, and parking areas. The Navigator also features several overlay options on the interactive map that allow users to view economic, local planning, environmental, and workforce statistics as well as predominant land uses for each zone. This tool allows potential investors and stakeholders to view the locations of special designations, such as Urban Enterprise Zones or Transit Villages.
Exploring New Jersey Opportunity Zone Investments
The Opportunity Zone Program offers significant tax incentives to a wide range of investors. While federal and state entities continue to issue guidance and resources, navigating the Opportunity Zone program can still be confusing. With tight deadlines and strict eligibility requirements, it is imperative to have a team of seasoned advisors guide you through the process.
With a diverse team of affordable housing, real estate, tax and corporate attorneys, Scarinci Hollenbeck stands ready to help New Jersey investors navigate the new program and realize its benefits. To discuss potential opportunities,.
If you have any questions, please contact us
If you have any questions or if you would like to discuss the matter further, please contact Jeff Cassin, , or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.