H.R. 7820 extends and expands the Qualified Opportunity Zones (QOZ) program, which provides tax incentives for investments in economically distressed areas. The bill extends the investment deadline from 2026 to 2036 and doubles the period that zones can remain designated from 10 years to 20 years, giving investors more time to participate in the program. For residential rental projects specifically, the bill adds new requirements: at least 30 percent of units must be occupied by residents earning no more than the area's median income, annual rent increases are capped at 3 percent, and investors must receive 60 days' notice before any rent increase. The bill also increases the tax benefits for qualifying residential projects, raising the basis increase and holding period tax deferrals for these investments. These changes take effect upon the bill's enactment and are designed to encourage investment in affordable housing within opportunity zones while protecting low-income tenants from steep rent hikes.
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