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OZ LEGISLATION TRACKING

On July 4, 2025, President Trump signed H.R. 1 into law, permanently extending the Opportunity Zone (OZ) program and introducing several reforms under what is commonly referred to as “OZ 2.0.” The legislation creates a new framework for future OZ investments starting in 2027, while maintaining the current OZ map through the end of 2026.

Below, we've compiled a comprehensive timeline of updates, along with curated articles, blogs, and podcasts from leading industry voices. These resources capture the key developments, implications of the finalized legislation, and what the future of Opportunity Zones will look like moving forward.

Opportunity Zone Legislation Update (July 2025):

TRUMP SIGNED OZ 2.0 INTO LAW

On July 4, 2025,  President Trump  officially signed the One Big Beautiful Bill into law, solidifying the Opportunity Zone program as a permanent part of federal policy. With this enactment, the OZ 2.0 provisions are now in effect.

Key OZ 2.0 Provisions Included In H.R. 1:

  • Permanent status. Opportunity Zone policy is no longer sunset-dated. It will become a standing component of the Internal Revenue Code.

  • Rolling five-year gain deferral. Any qualifying gain invested into an OZ fund after December 31, 2026 receives a five-year deferral.

  • New basis step-up schedule. Standard Qualified Opportunity Fund (QOF) investors receive a 10 percent basis step-up after five years; Qualified Rural Opportunity Fund (QROF) investors receive 30 percent.

  • Additional rural incentives. Rural OZ tracts (defined as areas outside cities or towns of 50,000 people or contiguous urbanized areas) also enjoy a lower 50 percent substantial-improvement threshold, versus the usual 100 percent.

  • Zone re-designations every decade. Governors must select new zones every 10 years starting July 1, 2026. New zones will go into effect every 10 years starting January 1, 2027.

  • Tighter census tract criteria. The “low-income community” threshold falls from 80 percent to 70 percent of area or statewide median family income, and the non-low-income contiguous tract exception disappears. Also of note, the special rule for Puerto Rico is stricken from the statute. The island loses its blanket designation, and now may only select up to 25 percent of eligible tracts, just like all other states.

  • Expanded reporting requirements that finally cleared Senate parliamentarian review, promising greater transparency for funds and investors

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Opportunity Zone Legislation Update (July 2025):

THE U.S. HOUSE OF REPRESENTATIVES PASSED H.R. 1, THE ONE BIG BEAUTIFUL BILL, WHICH WILL MAKE OPPORTUNITY ZONES PERMANENT

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On July 3, 2025, the U.S. House of Representatives narrowly passed H.R. 1, the One Big Beautiful Bill, by a vote of 218–214, officially making the Opportunity Zone program permanent. Notably, all OZ 2.0 provisions were preserved in the final version.

Key OZ 2.0 Provisions Included In H.R. 1:

  • Permanent status. Opportunity Zone policy is no longer sunset-dated. It will become a standing component of the Internal Revenue Code.

  • Rolling five-year gain deferral. Any qualifying gain invested into an OZ fund after December 31, 2026 receives a five-year deferral.

  • New basis step-up schedule. Standard Qualified Opportunity Fund (QOF) investors receive a 10 percent basis step-up after five years; Qualified Rural Opportunity Fund (QROF) investors receive 30 percent.

  • Additional rural incentives. Rural OZ tracts (defined as areas outside cities or towns of 50,000 people or contiguous urbanized areas) also enjoy a lower 50 percent substantial-improvement threshold, versus the usual 100 percent.

  • Zone re-designations every decade. Governors must select new zones every 10 years starting July 1, 2026. New zones will go into effect every 10 years starting January 1, 2027.

  • Tighter census tract criteria. The “low-income community” threshold falls from 80 percent to 70 percent of area or statewide median family income, and the non-low-income contiguous tract exception disappears. Also of note, the special rule for Puerto Rico is stricken from the statute. The island loses its blanket designation, and now may only select up to 25 percent of eligible tracts, just like all other states.

  • Expanded reporting. Transparency measures, written to satisfy Byrd-rule tests, kick in for tax years beginning in 2027.

Opportunity Zone Legislation Update (July 2025):

SENATE PASSES OZ 2.0 LEGISLATION

The U.S. Senate passed H.R. 1, the One Big Beautiful Bill on July 1, 2025, which will make Opportunity Zones permanent. The bill now returns to the House for a final vote before it can be signed into law by President Trump.

After a nearly 12-hour session, the House Rules Committee moved the bill forward, clearing it for debate on the House floor. 

Key OZ 2.0 Provisions Included In H.R. 1:

  • Permanent status. Opportunity Zone policy is no longer sunset-dated. It will become a standing component of the Internal Revenue Code.

  • Rolling five-year gain deferral. Any qualifying gain invested into an OZ fund after December 31, 2026 receives a five-year deferral.

  • New basis step-up schedule. Standard Qualified Opportunity Fund (QOF) investors receive a 10 percent basis step-up after five years; Qualified Rural Opportunity Fund (QROF) investors receive 30 percent.

  • Additional rural incentives. Rural OZ tracts (defined as areas outside cities or towns of 50,000 people or contiguous urbanized areas) also enjoy a lower 50 percent substantial-improvement threshold, versus the usual 100 percent.

  • Zone re-designations every decade. Governors must select new zones every 10 years starting July 1, 2026. New zones will go into effect every 10 years starting January 1, 2027.

  • Tighter census tract criteria. The “low-income community” threshold falls from 80 percent to 70 percent of area or statewide median family income, and the non-low-income contiguous tract exception disappears. Also of note, the special rule for Puerto Rico is stricken from the statute. The island loses its blanket designation, and now may only select up to 25 percent of eligible tracts, just like all other states.

  • Expanded reporting. Transparency measures, written to satisfy Byrd-rule tests, kick in for tax years beginning in 2027.

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Opportunity Zone Legislation Update (June 2025):

SENATE UPDATES ITS DRAFT VERSION OF THE 2025 TAX BILL

On June 28, 2025, the Senate released an updated draft of the 2025 tax bill (pgs. 426-456) featuring newly revised proposals to reform the Opportunity Zone program:

Key Highlights:

  • Permanent Structure: The program would shift to a recurring 10-year designation cycle. Newly certified census tracts would take effect on July 1, 2026, with investments allowed starting January 1, 2027.
  • Revised Basis Adjustment: Investors who hold Qualified Opportunity Fund (QOF) investments for at least five years would receive a 10% step-up in basis on deferred gains. For those investing in Qualified Rural Opportunity Funds, the basis increase would be 30%.
  • End of Deferral Period: For capital gains invested after December 31, 2026, the deferred gain must be recognized at the earlier of either the investment’s sale or December 31, 2033. Additionally, a new 10-year recognition window would begin for each tranche of investment.
  • Modified Substantial Improvement Rule: For rural opportunity funds, a property would be considered substantially improved if the investment equals or exceeds 50% of its original cost basis—down from the current 100% threshold.
  • Stricter Eligibility Criteria: To qualify, tracts must now have a median family income below 70% of the area’s average, a drop from the previous 80%. Eligibility for contiguous tracts would be eliminated, and Puerto Rico’s authority to designate OZs would sunset at the end of 2026.
Opportunity Zone Legislation Update (June 2025):

SENATE UNVEILS ITS DRAFT VERSION OF THE 2025 TAX BILL

 On June 16, 2025, the Senate released its draft of the 2025 tax bill, incorporating significant proposed changes to the Opportunity Zone (OZ) program (pgs. 199-229) initially introduced by the House. 

Key Highlights:

  • OZ permanence, with decennial OZ cycles. New zones every 10 years, each with a fixed 10-year life and gain recognition date. The first redetermination date is set for July 1, 2026, with subsequent reviews every 10 years.
  • Revised basis step-up schedule. An annual basis step-up accrual model (1% + 1% + 1% + 2% + 2% + 3%) replaces the old 5- and 7-year cliffs.
  • Rural OZ boost. A 3× basis multiplier and relaxed improvement test for rural-focused QOFs. Max basis step-up of 30% for Rural QOF investors.
  • Tighter eligibility rules for zone designation. New low-income community definition (≤ 70% MFI) and elimination of the “contiguous tract” rule could sharply reduce qualifying areas.
Opportunity Zone Legislation Update (May 2025):

THE HOUSE PASSES THE "ONE BIG BEAUTIFUL BILL"

On May 22, 2025, the House passed the Trump Tax Legislation, which includes significant updates to the Opportunity Zone (OZ) program as part of the broader 2025 tax bill.

Key Highlights:

  • Current OZ designations end December 31, 2026.
  • A new round of OZs will launch in 2027, with at least 33% located in rural areas.
  • Post-2026 investments may qualify for:
    • 10% basis step-up after 5 years
    • 30% step-up for rural-focused OZ funds
  • The 10-year federal tax-free exit on any fund profits remains intact.
  • New reporting requirements aim to bring greater transparency to OZ investments.

 

OZ Legislation News

July 15, 2025 | High-stakes battle over Opportunity Zones 2.0 will soon begin. Here's how to get a jumpstart.
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High-stakes battle over Opportunity Zones 2.0 will soon begin. Here's how to get a jumpstart.

July 15, 2025

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July 10, 2025 | Congress Made Opportunity Zones Permanent. Here’s What Happens Next
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Congress Made Opportunity Zones Permanent. Here’s What Happens Next

July 10, 2025

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July 4, 2025 | Trump Signs Megabill: Opportunity Zones Made Permanent
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Trump Signs Megabill: Opportunity Zones Made Permanent

July 4, 2025

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July 3, 2025 | House Passes Opportunity Zones 2.0 Bill
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House Passes Opportunity Zones 2.0 Bill

July 3, 2025

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July 3, 2025 | Congress Passes ‘One Big Beautiful Bill,’ Makes Opportunity Zone Program Permanent
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Congress Passes ‘One Big Beautiful Bill,’ Makes Opportunity Zone Program Permanent

July 3, 2025

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July 1, 2025 | Senate Passes Opportunity Zones 2.0 Legislation
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Senate Passes Opportunity Zones 2.0 Legislation

July 1, 2025

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July 1, 2025 | Senate Narrowly Passes Reconciliation Bill; OZ Program Poised for Permanent Expansion
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Senate Narrowly Passes Reconciliation Bill; OZ Program Poised for Permanent Expansion

July 1, 2025

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July 1, 2025 | ‘One Big Beautiful Bill’ Nears Key Vote as GOP Eyes Legislative Win
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‘One Big Beautiful Bill’ Nears Key Vote as GOP Eyes Legislative Win

July 1, 2025

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How the Senate tax plan would revamp Opportunity Zones

June 30, 2025

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June 28, 2025 | Senate Bill Would Make Opportunity Zone Program Permanent, Expand Benefits and Oversight
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Senate Bill Would Make Opportunity Zone Program Permanent, Expand Benefits and Oversight

June 28, 2025

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June 17, 2025 | Senate Bill Would Make Opportunity Zone Program Permanent
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Senate Bill Would Make Opportunity Zone Program Permanent

June 17, 2025

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June 17, 2025 | Senate Finance Committee Bill Includes Win for OZs but Differs From House on SALT and QBI Provisions
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Senate Finance Committee Bill Includes Win for OZs but Differs From House on SALT and QBI Provisions

June 17, 2025

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OZ 2.0 Advocacy Center

May 22, 2025

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May 22, 2025 | House Passes Trump Tax Legislation, Which Would Extend OZ Incentive
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House Passes Trump Tax Legislation, Which Would Extend OZ Incentive

May 22, 2025

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House Bill Would Result In 22% Fewer Opportunity Zones

May 20, 2025

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May 18, 2025 | Trump’s ‘One Big Beautiful Bill’ Advances to House Floor After Weekend Breakthrough — Opportunity Zones, QBI, and BDC Wins Remain Intact
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Trump’s ‘One Big Beautiful Bill’ Advances to House Floor After Weekend Breakthrough — Opportunity Zones, QBI, and BDC Wins Remain Intact

May 18, 2025

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May 16, 2025 | Conservatives Unite With Democrats to Stall Trump’s ‘One, Big, Beautiful Bill’
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Conservatives Unite With Democrats to Stall Trump’s ‘One, Big, Beautiful Bill’

May 16, 2025

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May 13, 2025 | Opportunity Zone Legislation Advances, But Misses The Mark
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Opportunity Zone Legislation Advances, But Misses The Mark

May 13, 2025

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May 12, 2025 | House GOP Tax Proposal Offers Major Wins for BDCs and Opportunity Zones
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House GOP Tax Proposal Offers Major Wins for BDCs and Opportunity Zones

May 12, 2025

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May 12, 2025 | House GOP Proposes Sweeping Overhaul of Opportunity Zone Program
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House GOP Proposes Sweeping Overhaul of Opportunity Zone Program

May 12, 2025

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April 16, 2025 | Opportunity Zones 2.0 urged as tax program boosts multifamily investing
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Opportunity Zones 2.0 urged as tax program boosts multifamily investing

April 16, 2025

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March 4, 2025 | QOF Survey Shows Equity Investment Sluggish, But Boost Expected with OZ Extension Legislation
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QOF Survey Shows Equity Investment Sluggish, But Boost Expected with OZ Extension Legislation

March 4, 2025

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March 3, 2025 | Trump’s “baby”: Developers spill on what they want in Opportunity Zone 2.0
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Trump’s “baby”: Developers spill on what they want in Opportunity Zone 2.0

March 3, 2025

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March 3, 2025 | Tax Legislation Provides Rare Moment to Enhance and Make Permanent Opportunity Zones
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Tax Legislation Provides Rare Moment to Enhance and Make Permanent Opportunity Zones

March 3, 2025

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February 24, 2025 | New Administration Sparks Optimism Around Opportunity Zones
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New Administration Sparks Optimism Around Opportunity Zones

February 24, 2025

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February 11, 2025 | Feb. 11, 2025: Opportunity Zones Working Group's Recommendations for Modernization and Renewal of OZs
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Feb. 11, 2025: Opportunity Zones Working Group's Recommendations for Modernization and Renewal of OZs

February 11, 2025

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February 4, 2025 | Opportunity Zones Working Group: Looking to 2025 and Opportunity Zones 2.0
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Opportunity Zones Working Group: Looking to 2025 and Opportunity Zones 2.0

February 4, 2025

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February 4, 2025 | Opportunity Zones Working Group: Looking to 2025 and Opportunity Zones 2.0
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OZ Working Group Submits Letter to Trump Transition Team Urging Strengthening of OZ Incentive

January 9, 2025

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