Opportunity Zone Program
Two of Fredericksburg, Virginia’s, six Census tracts are part of the federal government’s exciting new Opportunity Zone and Opportunity Fund program. This program provides investors with yet another great reason to invest in our city. View Why Fredericksburg.
The Opportunity Zone program will allow investors to receive tax benefits on capital gains by investing those gains in qualified census tracts designated as part of the program.
Fredericksburg’s two designated tracts comprise all the land west of U.S. 1, in addition to a small section east of U.S. 1 in the northern part of the City between the canal and river. Among the areas of the City located in the two tracts are the Hylton property, Celebrate Virginia South, Central Park, Eagle Village, the Route 3 and 1 corridors, the Mary Washington Hospital campus, Idlewild and the Mill District/Princess Anne corridor (the properties in pink on this map.
Identifying Opportunity Zone Addresses
To identify Opportunity Zone properties in the City of Fredericksburg and learn more about each, utilize the Fredericksburg GIS (After agreeing to terms, select map tab, scroll down on the left menu to “Tourism and Economic Development” and select “VA Federal Opportunity Zone”).
The Opportunity Zone program offers the below tax benefits for investing in low-income communities through a qualified Opportunity Fund:
1. Temporary Deferral
A temporary deferral of inclusion in taxable income for capital gains reinvested into an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the opportunity zone investment is disposed of or December 31, 2026.
2. Step-Up In Basis
A step-up in basis for capital gains reinvested in an Opportunity Fund. The basis is increased by 10% if the investment in the Opportunity Fund is held by the taxpayer for at least 5 years and by an additional 5% if held for at least 7 years, thereby excluding up to 15% of the original gain from taxation.
3. Permanent Exclusion
A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in an Opportunity Fund if the investment is held for at least 10 years. This exclusion only applies to gains accrued after an investment in an Opportunity Fund.