Opportunity zones provide revitalization funding

State and county officials are promoting a new economic development revitalization program that aims to attract investors who want to reduce taxes on capital gains to invest in designated opportunity zones throughout Delaware, including five zones in Sussex County.

Among the state's 25 zones are three in Seaford and one each in Georgetown and Laurel.

Under the program, investors can contribute capital gains in opportunity zone projects including housing, mixed use, transportation, infrastructure and projects with social impact.

Investors who contribute may defer payment taxed on their capital gains until Dec. 31, 2026; after seven years reduce the tax owed by up to 15 percent; and eliminate tax on gains earned from the opportunity fund if the investment is held 10 years.

Patty Cannon, director of special projects for Delaware Division of Small Business, which coordinates the state program, was one of the speakers March 22 at an opportunity zones seminar hosted by Sussex County Economic Development.

The designation means qualifying investors are eligible for federal tax incentives in identified low-income and economically challenged areas. Zone designations are intended to encourage additional private investment and bolster ongoing community efforts.

“These new incentives will help make central and western Sussex County a new frontier for growth opportunities in our county,” said Sussex County Economic Development Director William Pfaff.

Cannon said the zones are in areas where developers would not likely invest without the financial incentives built into the program. Cannon stressed that only capital gains can be used in the program, and there is no limit on the minimum or maximum of the investment.

Cannon said investors with capital gains typically invest in projects in other countries to avoid paying U.S. taxes. “This way, we can keep the money at home in our communities,” she said. “Investors can see where they can make a difference. Keeping money locally helps all of us.”

Pfaff said the designation and other incentives, such as the county’s new economic development zones and Delaware’s Downtown Development District programs, can be combined to make investing in the designated areas even more beneficial.

For more information, go to business.delaware.gov/opportunity-zones or phone Pfaff at 302-855-7770.