Monday, December 11, 2023

Federal tax breaks could spark investment in these Virginia Beach neighborhoods

VIRGINIA BEACH — Eight areas in the city could see an influx of investment dollars under a new, federal tax-incentive program intended to spur investment in low-income communities around the country.

The opportunity zones program rewards investors with tax breaks for putting money earned from other investments back into businesses or real estate projects, according to the city.

Opportunity zones were created as a result of the federal Tax Cuts and Jobs Act of 2017.

They are intended to galvanize investment by allowing taxes to be deferred until the end of 2026 if the gains are invested in a project in a designated zone within 180 days, city officials said in a news release.

In Virginia, 212 census tracts, the maximum number allowable per state, were designated as opportunity zones (out of 901 eligible census tracts).

Eight of those are in Virginia Beach: Burton Station, Newtown, Pembroke, Rosemont, Lynnhaven, Hilltop, Resort Area and Centerville.

Selected opportunity zones have a poverty rate of at least 20 percent or a median family income no greater than 80 percent of the statewide median income.

In the state of Virginia the Federal Poverty Threshold for a family of four is an income of $25,750 a year.

According to Census ACS data from 2017, Virginia’s median household income is $71,535 a year.

“Capital gains are earned when an investment – like stock or real estate – increases in value,” said Virginia Beach Economic Development Director Taylor Adams. “Many times, people will hang on to property that has appreciated in order to avoid capital gains taxes.

The federal program is designed to incentivize investors, in the form of tax savings, to sell assets and invest the capital gains in areas that are in need of a boost, according to the city.

Individuals, corporations, partnerships and real estate investment trusts may all invest in opportunity zones.

Business and real estate development is unrestricted as long as it is not deemed something that would contribute to immoral or criminal behavior.

To view Virginia Beach’s eight opportunity zones, visit​​.

Related Articles