As momentum builds around “QOZ 2.0” following the signing of the One Big Beautiful Bill Act, which indefinitely extended the Qualified Opportunity Zones (QOZ) program, many investors are wondering whether to wait for new legislation—or act now.
While future enhancements to QOZs will eventually materialize (January 1, 2027), we see the current market environment continuing to offer compelling reasons to invest.
The Clock is Ticking on Realized Capital Gains
One of the most important topics to note is that investors with realized capital gains have 180 days to reinvest in a Qualified Opportunity Fund and access key tax benefits. Waiting for QOZ 2.0 could mean missing that window—and losing the chance to defer or eliminate future gains.
Invest in QOZ Projects with Proven Progress
Under the existing QOZ structure, investors can select projects that are already in advanced stages of development. These matured projects have the potential to offer a stronger risk-return profile, having cleared critical pre-development milestones such as zoning approvals, entitlements, financing, and building permits—which may significantly reduce execution risk. By investing in current OZ development projects, investors can participate in assets with clearer timelines now.
Development Project Phases
Current Opportunity Zones
QOZs, created under the 2017 Tax Cuts and Jobs Act, were designed to revitalize economically distressed communities through private investment, not taxpayer dollars. In its current state, the program is intended to deliver both social and financial benefits by spurring economic development and job creation, while offering investors significant tax advantages in return. With more than 8,700 QOZ-eligible communities clearly identified in the original program, investors can perform due diligence on the communities they may be investing in, offering a level of certainty.
While QOZ 2.0 may eventually introduce new zone designations, the specific census tracts are not expected to be finalized until late 2026, creating some uncertainty for investors. This lack of clarity makes it challenging to plan, underwrite, or confidently deploy capital. Additionally, many current development projects may not meet the stricter income thresholds proposed under QOZ 2.0. By investing now, investors can target established communities with mature projects and a demonstrated history of economic revitalization.
Start the 10-Year Hold Period ASAP
A powerful advantage of QOZ investing is the potential to eliminate federal capital gains taxes on appreciation after a 10-year holding period. For investors with long-term horizons, the QOZ investments can offer a chance to grow capital. By investing now, investors can start that clock immediately, positioning themselves for a potential tax-free exit as early as 2035. Waiting for QOZ 2.0 could delay that timeline into the late 2030s, pushing back key wealth-building and estate planning opportunities.
Amid today’s environment of market volatility, liquidity may be less of a priority for investors focused on long-term growth, making the potential “tax elimination” benefit of QOZs even more compelling and a strong reason to act now rather than wait.
Bottom Line
We see the current QOZ market offering a combination of tax efficiency, reduced development risk, and more mature projects. For investors with realized gains, waiting for QOZ 2.0 could mean missing the window of opportunity entirely. Acting now can potentially unlock significant benefits and position investors for long-term growth.
