Opportunity Zones: Navigating the “One Big Beautiful Bill Act”

Atlas Real Estate Advisors  /   September 8, 2025

On July 4, 2025, President Trump signed the “One Big Beautiful Bill Act” (OBBBA), which makes the Opportunity Zone (OZ) tax incentives permanent and introduces a suite of strategic updates. Originally part of the Tax Cuts and Jobs Act of 2017, the OZ framework—which channels capital gains into investments in low-income communities—has now been institutionalized, opening a new era for investors and developers alike. This bill updates, improves, and revitalizes the Opportunity Zone program to ensure it truly benefits low-income communities while remaining attractive to investors.

Key Changes in a Nutshell

Permanent Program, Revised Timeline
The OZ program, once set to expire in 2026, has now been made permanent. Beginning in 2027, a streamlined deferral and exclusion timetable kicks in: a five-year window to defer gains, a 10-year holding period for final tax exclusion, and a frozen step-up in basis at 30 years 

Better Incentives in Rural Areas
The OBBBA introduces “Qualified Rural Opportunity Funds.” These investments offer a 30% step-up in cost basis after five years and reduce property improvement requirements from 100% to 50% in rural zones 

Redesignation of Zones
Starting July 1, 2026, OZ designations will be refreshed periodically to ensure compliance with evolving socioeconomic conditions. Eligibility criteria are stricter: 70% of area or state median income (down from 80%), a minimum 20% poverty rate, and the removal of contiguous tract exceptions

Enhanced Reporting & Enforcement
The OBBBA brings in layered reporting mandates.. Funds now must file timely elections, even in the absence of income—failure to do so could trigger expensive corrective processes.

Overall Tax Benefit Curve
The removal of a 2047 sunset means a permanent 30-year window for gain exclusion. Any investment held beyond that receives a step-up in basis and continued tax exclusion

What This Means for Investors

• Long-term clarity, short-term urgency: The program’s permanence allows for extended planning, but investors should consider capitalizing on current rules before year-end 2026 to benefit from the existing, richer timeline.
  
• Rural investments = better returns: The enhanced terms for rural OZ funds create compelling upside for developers in farming, energy, and small-town revitalization.
  
• Compliance is more crucial than ever: The expanded reporting requirements mean that missteps can be costly. Accurate fund administration is now essential.

Atlas Can Help You Form a Strategy

Timing Considerations

• 2025–2026: Deploy capital before year-end to lock in the 5-, 7-, and 10-year benefits of the original rules.
• 2027 onward: Shift to long-term plays under the new framework, especially via rural OZ funds.

Rural OZ Research
Deploy deep-market research into qualifying rural tracts, especially for sectors like housing, energy, agribusiness, and rural healthcare. The lower improvement thresholds and richer tax advantages make these corridors particularly attractive.

Compliance & Reporting 

Given heightened IRS scrutiny and new forms, partner with compliance experts—to manage filings, audits, and fund oversight.

Zone Requalification
Track census data and maintain adaptability. Pivot options or secondary-site eligibility assessments could protect investment value in case of decertification.

Final Take

The OBBBA cements Opportunity Zones as a permanent, tax-smart vehicle for forward-thinking real estate investment. With richer incentives—especially in rural tracts—paired with enhanced oversight, the landscape is both promising and demanding.   Atlas Real Estate Advisors is positioned to guide investors and developers through this new environment—combining timing acumen, rural expertise, compliance rigor, and strategic flexibility to maximize OZ potential across evolving communities.

*This blog post is for informational purposes only and does not constitute legal, tax, or investment advice. Investors should consult with a qualified tax advisor, accountant, or legal professional before making any investment decisions or taking action based on the information provided.