Portions of Huntsville have been designated as Opportunity Zones for investors. What does this mean for Huntsville?
Having Huntsville designated as an opportunity zone provides more incentive for money to be invested in our community.
The opportunity zones were created by the United States Congress when House Resolution 1 was signed into law on December 22, 2017. The zones are designated by the state, approved by the Internal Revenue Service and provide a new incentive to investors. They encourage investors to put their capital into businesses and real estate in areas that were previously neglected by outside capital.
These Opportunity Zone Funds are an investment in a stock or partnership interest in a business or business (income producing) property. Various projects have been established throughout the United States, including multi-family properties, housing renovation, student housing, commercial real estate, hotels, the hospitality industry, renewable energy technologies, infrastructure, primary care and wellness, manufacturing businesses, disaster recovery, professional sports, agricultural businesses, solar and retail.
Investors can form a partnership or a corporation to create an Opportunity Zone Fund. 90% of the funds must be invested within the designated opportunity zone.
The tax benefits of investing in an Opportunity Zone Fund are tremendous. Essentially an investor can sell an asset that generates a capital gain. The capital gain can go into an Opportunity Zone Fund. The investor is able to defer their taxes. The incentive comes in for the taxpayer when they keep their money invested. If they keep it in the fund for 10 years, they do not pay any capital gains tax on their Opportunity Zone Fund investment.
This law was passed by congress to promote the disbursement of finances throughout The United States of America, rather than finances being disbursed in a limited number of areas, the way it has been done in the past.
To see what portions of Huntsville are located in the Opportunity Zone, go to https://www.arcgis.com/apps/View/index.html?appid=9c692acbb39048a987c8c05d21ccf90b. You can also go to https://opportunitydb.com/location/texas/. For more specifics about how to invest in an Opportunity Zone Fund go to www.opportunityzoneresourcecenter.com.
Daiquiri Beebe is a Huntsville resident and realtor for Abby Realty.