Opportunity Zones
Opportunity Zones are one of the largest federal community development tax incentives in the United States and were recently renewed by federal tax changes. Opportunity Zones were designed to mobilize private investments in lower-income communities by incentivizing the reinvestment of capital gains into projects in designated census tracts. Incentives include deferral of tax liability, step-up in basis, and tax-free growth. Qualifying investments include real estate, business expansion, manufacturing, energy, and other projects.
As part of this renewal of Opportunity Zones through federal tax changes, the new round of designation is currently underway and set to take effect on January 1, 2027.
The Executive Office of the Governor must send nomications to the federal Department of Treasury.
Background
In April, the federal government released its list of eligible census tracts under Opportunity Zones 2.0 (OZ 2.0). See map below.
By the end of September, the state will officially nominate up to 25% of eligible tracts for designation as OZ 2.0 tracts. Designations are set to take effect on January 1, 2027, and will last 10 years; these designations cannot be revised.
MEDC is a convener of statewide stakeholders. Questions about policy definitions, tract eligibility requirements, and project applications can be directed to the U.S. Department of Treasury and U.S. Department of Housing and Urban Development (HUD):
- To review a comparison of OZ 1.0 and 2.0 legislation, visit the HUD Opportunity Zone update page.
- To review OZ 2.0 eligibility criteria, visit the U.S. Department of Treasury policy documentation.
Share Your Thoughts and Insights
Between now and official nomination, interested parties are encouraged to share their input and recommendations with the State of Michigan via the Michigan Economic Development Corporation. Input and tract considerations can be submitted at:
- Statewide Stakeholder Roundtables
A series of stakeholder roundtables have been scheduled this summer in each of the state's properity regions. These will be coordinated with local housing and economic development organizations as they are scheduled. Learn about the nomination process and help align statewide and local interests. - Virtual Stakeholder Roundtable
A virtual stakeholder roundtable is scheduled for interested parties unable to attend an in-person regional meeting. Connect with others from your region, discuss opportunities, and influence nominations with your feedback.
Register Here for the Regional or Virtual Roundtable Events