Opportunity Zones 2.0 and What It Means for You
In this issue:
- Opportunity Zones 2.0: What it means for appraisers
- Free Webinar: WIN Speaker Series featuring Sara Bronin is on December 4
- Next Trending Topics Thursdays: Insights from experts of the CREFC
Insights
Opportunity Zones 2.0: New Opportunities for Appraisers
The recently enacted 2025 Tax and Spending Bill created Opportunity Zones 2.0 (OZ 2.0), making the incentive permanent and introducing new incentives that may expand feasibility and due diligence opportunities for appraisers. The original 2017 law offered temporary tax deferrals and exclusions for investors who reinvested capital gains in Qualified Opportunity Funds (QOFs). OZ 2.0 makes the program permanent and introduces several new features designed to strengthen community investment—changes that have implications for appraisers involved in feasibility and due diligence assignments.
Shorter Timelines and Rural Advantages
OZ 2.0 shortens the holding period for a stepped-up basis to five years, replacing the previous seven-year requirement. Investors can now earn a 10% step-up for non-rural projects and a 30% step-up for rural ones.
Rural projects also benefit from a reduced improvement requirement—only 50% of property basis versus 100% previously—opening the door to more rehabilitation and adaptive reuse projects. These incentives could make smaller-scale and rural developments more viable, driving new appraisal assignments in feasibility and due diligence.
Redesignation and Permanency
Opportunity Zones will be redesignated every 10 years beginning in 2027, while the overall program becomes permanent. This cycle introduces both opportunity and risk, as census tracts may gain or lose OZ status. Appraisers analyzing market and site feasibility can help clients navigate these transitions.
Mapping and Market Insights
Novogradac’s Opportunity Zones Mapping Tool helps identify current OZ tracts and areas likely to qualify under the new rules. Appraisers can use it for preliminary due diligence, site selection, and comparative market studies, ensuring accurate geographic context for feasibility reports.
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Trending Topics Thursdays:
Sign up for our next free webinar
Commercial Real Estate in Transition: Market Insights and Valuation Perspectives
An in-depth discussion on current commercial real estate market dynamics and their implications for valuation, featuring experts from the Commercial Real Estate Finance Council (CREFC).
CREFC research professionals will share a data-driven overview of national and sector-specific trends, while an appraisal expert will offer insights on how shifting fundamentals are shaping property values and underwriting assumptions across markets.
Date: Thursday, Nov. 20, 2025
Time: 11:00 a.m. – 12:00 p.m. CT
Panelists:
- Jan Sternin, Senior Vice President and Managing Director, Berkadia
- Raj Aidasani, Managing Director, Research, CRE Finance Council
Advocacy Updates
Have a Tip or Policy Lead? Let Us Know!
The Appraisal Institute’s Washington office is always tracking policy developments and emerging issues that could affect appraisers, but some of our best insights come directly from members in the field. If you hear about a federal, state, or local issue that deserves our attention, or have a tip we should look into, please let AI’s Washington office know. Your input helps us stay ahead of the curve and ensures the voice of appraisers is heard when it matters most.
Real Estate Horizons
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Until Next week
Team Appraisal Institute
