Last year, the federal tax reform bill was passed with a number of provisions for business owners and entrepreneurs. Part of that reform bill was the Opportunity Zones program, which was originally designed to provide tax relief to investors. However, commercial real estate investors know a good thing when they see it, and are discovering benefits tailored to their market.
Defining Opportunity Zones
The plain language translation of the Opportunity Zones program states that investors who put capital into economically distressed areas will receive tax relief. The purpose is to stimulate a wide range of business sectors to invest in property. The Opportunity Zones program creates a deferral, which later becomes a full tax exemption, on capital gains.
NYC Commercial Real Estate Takes the Lead
While the Opportunity Zones program was designed for businesses of all types, NYC commercial real estate investors were positioned to come out as the big winners. The tax relief means that investors can purchase properties for adaptive re-use, new construction, and more. Due to the program, a new multifamily complex is going up in Queens which will boast up to 300 apartments. The program means investors throughout NYC can take on projects and acquire properties which would otherwise become huge financial burdens. Both business spaces and multifamily assets are going to be purchased or built at a very fast rate over the next year or two. Commercial real estate investors in New York City are viewing this as an opportune time to grow their portfolios without worrying about cumbersome capital gains taxes. If an investor holds onto a property for 10 years, they would be exempt from having to pay any capital gains taxes upon divestment.
The Initial Investment
The Opportunity Zones program is unlike any other tax incentive ever passed for commercial real estate investors. This goes beyond just low-income housing incentives for investors in New York. Office space, upscale apartments, business properties of all types can be used to take advantage of these new tax incentives. Because of the program, the forecast is great for investors, but also those in construction and trades because the demand will create new jobs. Because of this, NYC CRE investors are lining up financing strategies to take advantage of the Opportunity Zones program.
Express Capital Financing specializes in funding commercial real estate transactions throughout New York City. From acquisitions to renovations and even large construction, our team provides financing tailored to the needs of our clients. If you have properties in NYC lined up to take advantage of this new wave of tax deferments and exemptions, contact Express Capital Financing today.