While there aren't any plans to offer investors tax breaks for launching projects in poor areas in Dallas, there are rumblings. "We think qualified opportunity zones are the next big things," said Brian Dethrow, a Dallas-based tax partner with Jackson Walker. "Nobody's heard of them, but these rules may change the face of our cities."
The rules refers to the recent tax cut act that allows investors to invest in distressed areas including some rural ones while also reducing their own tax bills. The "opportunity fund," allows investors to take recent capital gains, roll them into a fund and defer federal taxes on the gains until Dec. 31, 2026. When the capital gains tax is paid, the normal tax would be cut by up to 15 percent. Profits from the venture created by the fund are tax-free if the investment is held at least 10 years, according to the Dallas Morning News.
Dallas gave Texas Gov. Greg Abbott a list of 52 census tracts for possible inclusion in the program, stretching from near the northwest city boundary to the southern border with Lancaster. "We submitted the kitchen sink almost," joked Vana Hammond, who heads Mayor Mike Rawlings' Grow South initiative.
Abbott, who is on record as saying the program can "attract billions in investment and economic growth to cities across Texas," then selected 15 census tracts in Dallas, the majority of them south of Interstate 30. Abbott "understands the passion around Grow South and how important southern Dallas development is to Dallas as a whole, so it wasn't surprising that he chose the majority of the southern Dallas opportunity zones," Hammond said.
