What happens to Opportunity Zones after 2026?

The Opportunity Zone program does not end after 2026: the original framework (often called OZ 1.0) closes to new deferrals on December 31, 2026, while a permanent, redesigned program (OZ 2.0) begins for new investments on January 1, 2027.

For investors already holding a QOF interest from before 2020, December 31, 2026 is the mandatory inclusion date: any capital gain you deferred must be recognized on that date whether or not you have sold your interest. That makes an accurate fair market value determination essential, since the taxable gain is calculated off that valuation rather than an informal estimate. The 10-year exclusion on post-investment appreciation still applies if you hold your interest that long, so the benefit does not disappear entirely once the inclusion event passes.

Starting in 2027, new zone designations take effect and new investments follow different rules, including a rolling deferral period rather than a single fixed deadline. Existing zones under the old rules phase out over the following two years, with most expiring December 31, 2028.

Because these transition rules intersect with real tax consequences, funds and LPs typically need a defensible, USPAP-compliant valuation of their QOF interest to support the 2026 inclusion calculation, financial reporting, or a transfer of their interest. A professional QOF valuation accounts for the fund's underlying assets, applicable marketability and control discounts, and the inclusion event timeline. If you're weighing whether to hold through the transition, our answer on the risks of investing in a QOF covers related considerations worth reviewing alongside your valuation.