Rising Opportunities For Developers And Investors In New Jersey
We’ve all heard of the phrase opportunity lies around the corner and for some, this may quite literally be true. As part of New Jersey’s efforts to attract developers and investors to underutilized properties in low-income rural and urban communities, the state has developed programs such as the Opportunity Zones program to spark interest in these properties again. The best way to do this is to offer tax incentives and exemptions, financial assistance, and other perks to those willing to develop meaningful economic opportunities.
Finalized in 2018, New Jersey’s new Opportunity Zones program established these potential zones in 169 census tracts in 75 municipalities. In places like Hackensack, East Orange, and Newark, developers can invest in Qualified Opportunity Zone Properties and place their capital gains in an Opportunity Fund, eligible to any taxpayer with no federal guidelines or limitations on who can manage a Qualified Opportunity Fund. The tax incentives from doing this include capital gains deferred from taxation until exit from the fund, a reduction in capital gains tax liability, and new gains from the fund permanently excluded from the capital gains tax. Qualified Opportunity Funds can invest in an unlimited number of Opportunity Zones. Opportunity Zones even offer community-based non-profits the ability obtain additional investment from private investors with capital gains for projects. These projects produce a financial return on investment and foster a collaborative environment between the investor and the municipality.
The push for smart growth comes with New Jersey’s desire to redirect development to urbanized areas in order to revitalize them, which includes re-using existing buildings or developing new. Opportunity Zones are designed to increase attractiveness in business and real estate development projects in the communities that may need them the most, with the potential to change the demographics of the area for the better. The program epitomizes the initiatives Governor Phil Murphy is currently putting forth as a part of new tax incentive programs and a smart economic plan for the state. As long as you’re in the right zone, endless opportunity awaits.
If you would like to know if your property is in an Opportunity Zone, please call Michael Sylvester at 973-560-1400 ext. 187. For more information on this program, including an interactive Opportunity Zone map, please visit: