By Allie Rohlfs
What is an Opportunity Zone?
Opportunity Zones aim to increase business expansion, development and investments to low-income communities in California. Nominated by state governors, Opportunity Zone tracts must meet one of the following:
- Poverty rate of at least 20 percent
- Median family income below 80 percent of the greater metropolitan area
- Median family income below 80 percent of the median statewide family income
Established in the Tax Cuts and Jobs Act 2017, Opportunity Zones provide tax incentives for investors, who can invest in a fund that helps low-income communities. By doing so, investors may defer the payment of capital tax gains until 2026. Those who invest for one year receive a ten percent reduction on their bill, and those who invest for ten years do not pay taxes on any money made from the investment.
There are 879 Opportunity Zones in California and 57 counties within the state that have at least one zone. On the Central Coast, there are Qualified Opportunity Zones in San Luis Obispo County, Santa Barbara County and Fresno County. Other zones are found on this integrated map.
Supporting Small Businesses
Opportunity Zones provide the chance for small businesses to take advantage of loans and venture capital that can provide resources to start or grow its business. Small business centers can also be created due to Opportunity Zones, providing small businesses and entrepreneurs with support and resources.
Local governments in Opportunity Zones work to ensure that these resources are used to the benefit of the community, from providing business opportunities to affordable housing to sustainability efforts.
In order to take advantage of Opportunity Zones in your area, reach out to local government and representatives.