In a Tampa Bay Times article published on April 5, 2019, Rob Stern and Don Mastry, Shareholders in Trenam’s Real Estate Practice Group, shed light on the “tax havens” created for the Tampa Bay area in the Tax Cut and Jobs Act of 2017.
Being hailed as “hidden gems”, these tax havens, called Opportunity Zones, have the potential of providing what could be huge tax savings for investors while creating jobs.
The idea, hatched during the Obama administration and embraced by President Trump, is to revive low-income neighborhoods by building new housing, hotels and other projects that will create jobs.
It works like this: If you sell real estate, stocks or other investments and make a profit, you can defer capital gains tax by reinvesting the amount of a gain in an opportunity zone. The four-county Tampa Bay area has a total of 67 opportunity zones, including several near downtown St. Petersburg.
Don Mastry noted: “Our downtown is spreading out and as long as the economy holds up, I think there’s going to be development in areas where there hasn’t been before.”
However, so far, not much has happened.
“The developers tell me there are plenty of people with money to invest but they are having trouble finding projects that are profitable and making economic sense,” said Mastry.
Rob Stern has seen more activity. “I have clients that have put property under contract so they can purchase at the opportune time,” he said. “The tax advantages are so tremendous and so encouraging that the larger clients are investing time and capital to get ready to participate. But everybody is waiting for a little more clarity and direction from the feds.”
Read more about the opportunity zones here.
