Sunday , 16 June 2019
Breaking News

Opportunity Zones: Latest Investment Craze Pumps Up Prices

HOUSTON –  (Realty News Report) – Opportunity Zones, the new tax benefit that reduces the burden of capital gains tax, is elevating property prices around the nation.

Opportunity Zones are new and it’s difficult to gauge the impact until more sales have been closed. But the zones are creating a major buzz in the real estate community.

“Investors are gaining an understanding the benefits and potential value of property owned in one of the new Opportunity Zones,” said veteran valuation expert Mark Sikes of Deal Sikes of Houston. “This is particularly true in downtown Houston where the investment potential is significant. Over the last year, valuations appear to be up 5 or 10 percent for certain properties in downtown because of the Opportunity Zone designation. As additional transactions are closed, price gains may prove to be even stronger.”

Opportunity Zones, created by Congress as part of the Tax Cut and Jobs Act enacted in December 2017, were designed to promote investment and deliver improvement to distressed communities. Over 8,000 census tracts across the nation, 100 in Harris County, were designated as Opportunity Zones. The  IRS released more new clarifications to the regulations earlier this month.

The Opportunity Zones allow investors to defer capital gains tax if the properties are substantially improved and held for a number of years. If a property is held for 10 years, the capital gains may be permanently excluded from federal taxation.

‘It’s an economic development tool, essentially,” said Fort Worth attorney Brandon Jones of the Winstead law firm. “It’s one of the most powerful tax incentives I have seen, if not the most powerful.” Jones was speaking to a standing-room-only crowd at a recent ULI Conference in Houston.

The Hines organization, which has developed more downtown properties than anybody, just broke ground on a massive Opportunity Zone project in downtown Houston. It’s a 46-story residential tower on the corner of Preston and Milam.

Opportunity Zones are hot. The Trump administration is promoting them. The New York Times is reporting on them. So far this year, there have been dozens of OZ seminars around the country. Some news articles  from the East Coast have reported as 20 percent price bump for property in Opportunity Zones.

April 24, 2019 Realty News Report Copyright 2019

 

 

Leave a Reply

Scroll To Top
%d bloggers like this: