In summer 2025, Opportunity Zones, were established as a permanent federal program. Opportunity Zones (OZs) are low-income census tracts, which investors can make qualifying investments into new projects and enterprises in exchange for federal capital gains tax reductions. Since they were first established as a pilot program in 2017, OZs have encouraged investors to invest in new housing and other real estate projects across the country, including in Ohio.

Opportunity Zones 2.0

🏛️ Now permanent. The 2025 One Big Beautiful Bill Act (OBBBA) made the program permanent and introduced major reforms.

💰 Stricter eligibility. The low-income threshold drops from 80% to 70% of area median income; contiguous tract nominations are eliminated.

🌾 Rural incentives expanded. Larger tax benefits (30% step-up basis instead of 10% in other tracts) and a 50% reduction in the substantial improvement requirement for Qualified Rural Census Tracts.

📈 Tax incentives remain. Five-year tax deferment on capital gains and step-up basis for investments held for five years remains from original program.

Updates to Eligible Census Tracts

🗺️ Here is a map of tracts that are expected to be eligible in Ohio. The map may change slightly in Spring 2026, after new census data are released. Check back in Spring 2026.

📉 Ohio may have ~20% fewer designated OZs due to tightened eligibility.

Tax Benefits for Investing in a Qualified Opportunity Zone

📅 Capital gains tax deferred for 5 years.

📈 Investors that hold their investment for at least five years receive a 10% step-up basis. Investors that invest in Qualified Rural Opportunity Zones receive a 30% step-up basis.

⌛ If an investment is held for 10 years, the investor receives a tax-free appreciation cap (for up to 30 years).

Ohio Designation Process

🧭 Governors designate tracts. States nominate eligible census tracts for federal approval every ten years. Ohio Department of Development (ODOD) and the Governor’s Office will select tracts to submit to U.S. Treasury.

🦅 Federal Timeline. Governors can begin nominating census tracts to US Treasury on 7/1/2026.

🏛️ State Timeline. ODOD will open a 30-day online portal to accept local submissions April 2026.

⚠️No automatic renewals. Current OZs are not guaranteed redesignation; existing tracts must be renominated and ODOD will review all nominations.

What can Communities do now to get ready?

✅ Prioritize census tracts for nomination. Highlight local and regional collaboration. Align nominations with plans to emphasize how the region will work together to ensure investment in the census tract.

📣Connect to strategy. Show how OZ designation advances housing, revitalization, and economic goals already underway. Refer to past successes within existing or nearby OZs if possible.

🤝🏽Make the case regionally. Coordinate with MPOs/RPCs, JobsOhio affiliates, and economic development partners. MPOs/RPCs and the JobsOhio affiliates may be unofficially consulted by the Governor’s office.

🏗️ Advance project readiness. Identify and promote real estate projects in priority tracts by sharing this vision with the community, including local elected officials and wealthy individuals who can invest in projects.

🗨️ Engage local investors. Educate high-net-worth individuals and institutions on OZ 2.0 benefits.

Our community has an OZ but hasn’t seen investment, why care now?

🤝🏻 Stronger incentives in fewer places. Permanence and enhanced rural benefits make remaining zones more competitive and attractive.

🏘️ Opportunity for legacy cities and rural areas. Local investors who understand Ohio’s markets may see renewed value in investing.

Economic Innovation Group: Guidance for Governor’s and Mayors: A Playbook for High-Impact Designations

The Economic Innovation Group (EIG) has prepared a guide that aims to give state and local officials the clarity and confidence they need to make informed selections for the next round of Opportunity Zone (OZ) census tracts.

OZs 2.0 Guidance for Governors and Mayors: A Playbook for High-Impact Designation is organized around eight principles that define successful OZ designation strategies, including:

1. Get a head start

2. Set a statewide economic vision

3. Designate a lead coordinating entity within state government

4. Engage local partners strategically

5. Balance economic need and investment potential

6. Combine both quantitative and qualitative insights

7. Embrace purposeful transparency

8. Align OZ nominations with supportive policy tools

EIG also offers a three-part test for vetting individual census tracts:

1. The community test - is the area genuinely in need?

2. The market test - will designation stoke investor interest?

3. The policy test - are locals doing their bit to support investment, too?