Opportunity Zones in Tempe: Unlocking Long-Term Investment Potential

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A federal incentive supporting private investment, community revitalization, and sustained economic growth.

Benefits of Investing in Opportunity Zones

The Opportunity Zone program allows investors to defer and potentially reduce federal capital gains taxes by reinvesting eligible gains into a Qualified Opportunity Fund. These funds make qualifying investments in businesses or real estate located within designated Opportunity Zones.

For current investments, capital gains reinvested in a Qualified Opportunity Fund may be deferred until December 31, 2026, or until the investment is sold, whichever occurs first. For investments made after that date, gains may be deferred for up to five years from the date of investment or until disposition. Investments held for at least five years receive a 10 percent reduction in the taxable amount of the original deferred gain. For both current and future investments, capital gains generated by the Opportunity Zone investment itself may be permanently excluded from federal taxation if the investment is held for at least 10 years.

Investors and developers interested in Opportunity Zone projects in Tempe are encouraged to explore how this program can support long-term growth strategies. For more information, please visit our state partners at Arizona Commerce Authority, or the Economic Innovation Group's recent report and timeline.

Federal Overview

The Opportunity Zones program is a federal economic development initiative created under the Tax Cuts and Jobs Act of 2017 to encourage long-term private investment in designated communities. Opportunity Zones are specific census tracts identified as areas where new capital investment can support economic activity, redevelopment, and job creation while offering investors preferential federal tax benefits.

Recent federal legislation has strengthened and extended the Opportunity Zones program. The One Big Beautiful Bill Act, signed into law in July 2025, made Opportunity Zones a permanent feature of the federal tax code and established a recurring 10-year designation cycle. Beginning in mid-2026, governors will nominate new Opportunity Zone census tracts every decade, with the first new designations taking effect on January 1, 2027. This long-term structure provides greater certainty for investors, developers, and communities planning multi-year projects.

State Role

In Arizona, the Opportunity Zone framework was established through a coordinated effort involving local governments, tribal communities, counties, and state agencies. In 2018, the Arizona Governor’s Office and the Arizona Commerce Authority nominated 168 census tracts for designation, all of which were certified by the U.S. Department of the Treasury. This included five census tracts within the City of Tempe, positioning key areas of the city to attract new capital and development activity.

City Responsibility