Opportunity Zones Can Spur Redevelopment
There are four designated Opportunity Zones in Southwest Louisiana. These areas provide investors, property owners, government and business leaders a pathway to impact and improve struggling communities by realizing a tax benefit.
An Opportunity Zone is defined by the Internal Revenue Service as “an economically distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment.”
Large sections of DeRidder, Jennings, Lake Charles, and Oakdale obtained Opportunity Zone certification after governors nationwide provided the federal government with a list of regions in each state that needed assistance to stimulate economic development.
The Opportunity Zone program was added to the tax code by the Tax Cuts and Jobs Act that was signed into law in 2018.
Within Opportunity Zones, investors can utilize capital gains to spark the development of hotels, shopping centers, restaurants, grocery stores, hospitals, urgent care facilities, and multi-family housing.
What are Opportunity Zones?
- Investors sell off assets and generate capital gains.
- Capital gains are moved into a qualified opportunity fund.
- Funds can be used on the following types of projects: stocks of companies located in opportunity zones, partnership interest in qualified business and business property located in a zone.
How Do Opportunity Zones Work?
- Tax deferral on gains rolled into an opportunity fund (until 2026 at the latest).
- Tax reduction: five years total 10 percent; seven-year total 15 percent.
- Tax exclusion: on the appreciation of investment if held for 10 years.
The Alliance/Chamber SWLA is working in tandem with local, state and federal agencies and financial professionals to market our Opportunity Zones to potential investors.
Communities with Opportunity Zones need access to individuals and groups who are interested in development potential within these zones who are willing to share as much information as possible. Also, these communities are seeking investors who want to benefit from this tax reduction/exclusion tool.
Opportunity Zones provide qualified investors the possibility of building wealth, reducing their tax burden, and helping their community at the same time.
Residents living in the Opportunity Zones of DeRidder, Jennings, Lake Charles and Oakdale stand to benefit from new investments and can realize improved quality of life and economic prosperity.
For more information about Opportunity Zones, contact the Southwest Louisiana Economic Development Alliance at 337-433-3632 or email George Swift, firstname.lastname@example.org.