Published in The New York Law Journal and Law.com
In an article published on the front page of the New York Law Journal and in Law.com on July 22, VF Law Attorney Coni Rathbone discusses the newly enacted One Big Beautiful Bill Act (OBBBA), which was signed into law on July 4, 2025. The Bill has made a transformative impact on the Qualified Opportunity Zone (QOZ) program. Created in 2017 to drive investment into distressed communities, the QOZ initiative has now evolved into a permanent and more flexible economic development tool. Known informally as QOZ 2.0, the revised program offers long-term certainty and enhanced incentives for investors, developers, and the communities they serve. Notable updates include the removal of the sunset date, a rolling five-year tax deferral for capital gains, and a universal 10% step-up in basis after five years.
QOZ 2.0 introduces additional benefits for rural areas, reduced improvement thresholds, and the ability for states to redesignate zones every ten years. “For investors, real estate developers, and communities, with new incentives now available and the permanent status of the QOZ program, substantial tax benefits and the opportunity to improve disadvantaged areas are welcome news for 2025 and beyond,” said Rathbone. Enhanced transparency and compliance requirements are also built in, addressing past criticisms and supporting more responsible investment.
One of the most exciting combinations for investors lies in pairing Qualified Opportunity Funds (QOFs) with the new 100% Bonus Depreciation available under OBBBA. This dual strategy may eliminate depreciation recapture if the asset is held for 10 years, making manufacturing developments in QOZs even more attractive. As we approach the January 1, 2027, launch date for QOZ 2.0, it’s essential that investors work closely with experienced tax and legal advisors to align their strategies and maximize the benefits.
Rathbone is named one of the top 25 attorneys in the United States for Qualified Opportunity Zone work.
Read the story in full (subscriber-based), click here.