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Rural America: Preparing for the Next Chapter of Opportunity Zones

  • Writer: R. Levi Smith III
    R. Levi Smith III
  • Aug 26
  • 2 min read

Updated: Oct 28

The Opportunity Zone (OZ) program is poised for big changes under the proposed “Opportunity Zone 2.0” framework.


The Opportunity Zone (OZ) program is poised for big changes under the proposed “Opportunity Zone 2.0” framework. With new rules making OZs permanent and prioritizing rural investment, real estate developers and investors have fresh opportunities to capture tax savings and support underserved markets.

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What’s Changing

  • Permanent OZs: No more expiration dates — designations would renew every 10 years.

  • Rural priority: At least one-third of all new OZs must be rural, with extra tax benefits like a 30% basis increase after five years.

  • Lower improvement threshold: In rural OZs, only 50% of property value must be improved (down from 100%), making rehabilitation projects more attractive.

  • Greater transparency: Stricter reporting requirements on property, jobs, and investment impact.

  • More incentives: Enhanced step-ups in basis, especially for rural projects.


Why It Matters for Real Estate

  • More rural opportunities: Developers can tap into overlooked markets with new tax advantages.

  • Rehab-friendly: Easier to qualify existing buildings for OZ treatment, especially in rural areas.

  • Higher compliance burden: Investors should prepare for more detailed documentation and oversight.


The “Dead Zone” Transition Period

The shift from OZ 1.0 to OZ 2.0 could create a short gap:- Gains recognized in 2025 and 2026 may face tax before the new program begins in 2027.- Investors may choose to defer gains until 2027 or monitor for retroactive provisions.


How to Prepare

  • Evaluate your pipeline – Identify rural projects that could qualify under OZ 2.0.

  • Plan for 2026 taxes – Proactively address exposure from deferred OZ 1.0 gains.

  • Engage advisors early – Legal and tax advisors can help structure projects around new rules.

  • Leverage experts – Given added complexity, work with specialists who know OZ regulations inside out.


Bottom Line

The Opportunity Zone 2.0 framework could channel billions into rural America while creating powerful tax benefits for investors. But with more compliance requirements and a possible short transition gap, proactive planning is essential.


Next step: Review your pipeline and tax strategy now to see how you can take advantage of the new rural-focused OZ incentives.


This is not an offer or solicitation to buy or sell any securities. 

Some of the risks related to investing in commercial real estate include, but are not limited to: market risks such as local property supply and demand conditions; tenants’ inability to pay rent; tenant turnover; inflation and other increases in operating costs; adverse changes in laws and regulations; relative illiquidity of real estate investments; changing market demographics; acts of God such as earthquakes, floods or other uninsured losses; interest rate fluctuations; and availability of financing. Investments in real estate or real estate securities are not guaranteed and have the potential to suffer losses.


This site provides brief and general description of certain tax strategies including Opportunity Zones, Sections 1031, 1033, and 721 Exchanges. There are various risks related to purchasing securities as part of any planning strategy, including tax complexity, illiquidity and restrictions on ownership and transfer. RCX Capital Group and its representatives do not provide Tax Advice. Because each prospective investor’s tax implications are different, all prospective investors should consult with their tax advisors.

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