New Opportunity Zones Could be a New Beginning for Miami’s Inner-City
Author: Miami-Dade Beacon Council
There is a new economic development tool that you should be aware of that has been devised to encourage the growth of businesses in low income areas.
This started as a little-noticed provision of last year’s tax reform push. Today “Opportunity Zones” are starting to take shape, and according to several urban experts, has the potential to become the nation’s largest economic development program.
The program provides a tax incentive for investors to re-invest their unrealized capital gains into Opportunity Funds that are dedicated to investing into Opportunity Zones; specific low-income areas, based on designations by governors. The sites are chosen by the state and then approved by the Federal government.
Out of the 427 Opportunity Zones sites in Florida; 68 of those locations are in Miami-Dade County.
“The creation of these new Opportunity Zones provides new investment opportunities for some of Miami’s economically distressed areas,” said Michael Finney President & CEO, Miami-Dade Beacon Council. “This means greater consideration will be given to investing and providing jobs in areas of the county where they are needed most,” Finney said.
Opportunity Zones are economic development tools, created to spur economic development by providing tax benefits to investors. The zones:
- Allow investors to defer tax on any prior gains until the earlier of the date on which an investment is sold or exchanged, or December 31, 2026, so long as the gain is reinvested in a Qualified Opportunity Fund. If held for the full ten years, the tax reduction is 15%.
- If the investor holds the investment in the Opportunity Fund for at least ten years, the investor would be eligible for an increase in basis equal to the fair market value of the investment on the date that the investment is sold or exchanged.
The concept behind Opportunity Zones is that the longer the investment is held, the lighter the tax burden.
The Opportunity Zone sites throughout Miami-Dade County and Florida were certified by the U.S. Treasury on June 14, 2018.