Qualified Opportunity Zones 2.0: Key Changes for Investors in 2025
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Experience-Driven QOZ Investing
With investments in 16 ground-up QOZ developments since 2019, we bring real experience to sourcing, developing, and operating Qualified Opportunity Zone properties.
What is the QOZ program?
The Qualified Opportunity Zone program was created under the Tax Cuts and Jobs Act of 2017 to incentivize real estate investment in targeted communities in need of economic development, called QOZ’s. It provides significant tax advantages to investors who invest with capital gains. Some examples of assets that can be sold and the proceeds reinvested in a QOZ are stocks, real estate, a private business, precious metals, cryptocurrencies and art. In 2025, Congress passed the One Big Beautiful Bill (OBBB), which permanently extended and reformed the QOZ program. Under QOZ 2.0 rules (effective Jan. 1, 2027), key investor benefits include:
Tax Deferral
Defer federal taxes on eligible capital gains reinvested on or after January 1, 2027, for up to five years, with payment due at the end of the deferral period.
10% Step-Up in Basis
Investors who hold for at least five years may receive a 10% step-up in basis, reducing the taxable portion of the originally deferred gain.
Tax-Free Appreciation
After a 10-year hold, investors may be eligible to eliminate federal capital gains tax on any appreciation generated within the Qualified Opportunity Zone investment.
Understanding the Updated QOZ Program
Below is a summary of the rules for QOZ 1.0 versus QOZ 2.0.
| Feature | QOZ 1.0 | QOZ 2.0 |
|---|---|---|
| Duration | Expires 12/31/2026 | Starts 1/1/27; Permanent with 10-year cycles |
| Zone redesignation | One-time (2018) | Every 10 years (2027, 2037, etc.) |
| Income threshold for QOZ designation | ≤ 80% area median income | ≤ 70% area median income |
| Gain deferral | Gain deferred to 12/31/2026 | 5-year rolling deferral |
| Basis step-up | 10% (5 years), plus additional 5% (7 years) | 10% after 5 years |
| Exclusion cap | Permanent after 10 years | Permanent after 10 years |
| Rural funds (QROFs) | N/A | 30% step-up, lower improvement hurdle |
| Compliance and reporting | Modest | Expanded, with significant penalties for non-compliance |
Why Origin
A disciplined QOZ approach grounded in development experience, proprietary data, and active management.
QOZ Development Experience
Origin has completed or is actively developing $2.5 billion of ground-up projects, reflecting deep experience executing complex Opportunity Zone development strategies in high-growth U.S. markets.
Data-Driven Decision Making
Origin combines local market expertise with proprietary data to execute its QOZ strategy, pairing on-the-ground insight with Multilytics® driven rent forecasts.
Active Management
QOZ Fund properties are operated for five to seven years post-construction to meet the program’s 10-year hold requirement, with active management focused on revenue growth and disciplined expense control.
Looking for a QOZ fund?
Origin’s three QOZ Funds are currently closed. Join our notification list to be alerted when future QOZ investment opportunities become available.
Closed QOZ Funds
| Funds | Status | Target Net IRR* | Target Multiple* | Vintage |
|---|---|---|---|---|
| QOZ Fund I | Closed | 10% – 12% | 2.25x – 2.5x | 2019 |
| QOZ Fund II | Closed | 10% – 12% | 2.25x – 2.5x | 2021 |
| QOZ Fund III | Closed | 10% – 12% | 2.25x – 2.5x | 2023 |
* Targeted performance assumes a sale of the Fund’s investments 10 years after the Fund’s close. Targeted performance doesn’t represent an actual investment in the Fund and frequently has sharp differences from actual returns. Targeted returns are inclusive of appreciation and reinvestment of distributions and are net of fees. There can be no assurance that the Fund will achieve comparable results or meet its target returns.
Educational Resources for QOZ Investors
Guide
QOZ Investing: How to Defer Taxes & Grow Wealth
This guide explains how QOZs work, outlines program changes that will begin in 2027, and shares strategies for selecting fund managers.
Access New QOZ Deals
Join the notification list to receive alerts when new QOZ investment opportunities launch.