Southern Colorado has plenty of real estate in areas called Opportunity Zones (OZ). So what are Opportunity Zones? Let’s take a closer look at what Opportunity Zones are, how they’re created, and where they’re located.
What are Opportunity Zones?
In general terms, a federal Opportunity Zone (OZ) offers tax incentives to invest money in designated low-income urban and rural areas. Designated areas have to meet certain minimum percentage thresholds for low income—20% or more of its population living in poverty with a median income at 80% or less of the state median. It was part of a 2017 tax reform package. Investors may receive capital gains forgiveness or can reinvest capital gains. Taxpayers may defer tax on eligible capital gains by making an appropriate investment in a Qualified Opportunity Fund and meeting other requirements.
How are Opportunity Zones created?
Opportunity Zones were created through a nomination and designation process. Governors nominated qualifying areas that met the IRS low-income restrictions for Opportunity Zones. The U.S. Treasury assessed each nominated census tract and certified those that met the legislation’s criteria. Colorado has 126 approved Opportunity Zones by the U.S. Treasury.
Where are Opportunity Zones in Colorado?
The largest zones in terms of land mass in Colorado are located in more rural counties, including Alamosa, Bent, Rio Blanco, Crowley, Cheyenne, Lake, and Las Animas. Click here for a map of the OZ areas in Colorado. You’ll see areas in Alamosa, Las Animas, Archuleta, Fremont, Pueblo, and El Paso counties as well as plenty of other southern Colorado areas.
If you’re interested in learning more or looking at Colorado properties for sale, Code of the West Real Estate can help!