Trump's 2025 Plans For Opportunity Zones Legislation

President Trump has big plans for Opportunity Zones legislation in 2025. Extending and renewing the OZ incentive is part of his broader tax cuts agenda for his second term in the White House. And with the House passing their 2025 budget resolution last month, the stage is set to accomplish just that.

This panel discussion was recorded live at OZ Pitch Day on March 6, 2025, featuring Jimmy Atkinson of OpportunityZones.com, Emily Lavery of Fulcrum Public Affairs, and Peter Lawrence of Novogradac & Company.

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About The Opportunity Zones Podcast

Hosted by OpportunityZones.com founder Jimmy Atkinson, The Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in the Opportunity Zones industry.

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Transcript Summary

White House Support of Opportunity Zones

The panel discussed the Trump administration’s strong backing of Opportunity Zones, highlighting how this support increases the likelihood of an extension or expansion of the program.

Trump continues to publicly endorse OZs, recently calling them “the best economic development program ever.” His vocal support puts pressure on Congress to pass an extension.
Scott Bessent (Treasury Secretary) and Scott Turner (HUD Secretary) are both pro-OZ and will play key roles in shaping policy. Bessent is expected to focus on tax and regulatory clarifications, while Turner is likely to advocate for OZ-driven affordable housing and infrastructure projects.
The White House favors a comprehensive tax bill, meaning OZ extensions and reforms will likely be bundled into a broader tax package rather than passed as standalone legislation.
The administration has a history of executive action on OZs, including Trump’s 2018 executive order establishing the White House Opportunity and Revitalization Council, which helped align federal agencies in supporting OZ investments.

The Legislative Path for Extending Opportunity Zones

Opportunity Zones (OZs) were established under the 2017 Tax Cuts and Jobs Act and are set to expire at the end of 2026 unless Congress acts to extend or modify the program. The panel outlines the steps required for an extension or renewal:

Tax legislation must be introduced and passed – Any change to the OZ program must go through the House Ways and Means Committee and the Senate Finance Committee.
The House has passed a budget framework – While this bill does not explicitly include OZ reforms, it sets the stage for broader tax negotiations.
Trump and Congressional Republicans favor a comprehensive tax package – Instead of passing multiple bills, they aim to consolidate tax cuts, spending provisions, and other policy measures into one large bill.

While the panelists agree there is strong political support for extending OZs, they also caution that the process is far from guaranteed and will involve complex negotiations.

Three Possible Paths for OZ Extension and Renewal

The panel identifies three likely scenarios for the future of the Opportunity Zone program:

Basic Extension – Extending the capital gains tax deferral deadline from 2026 to 2028 or beyond, providing investors with more time to take advantage of the program.
Zone Redesignation and Expansion – Allowing governors to nominate new Opportunity Zones based on updated economic data, replacing certain tracts that may no longer qualify.
Permanent OZ Status – Embedding OZs into the tax code as a permanent investment incentive, eliminating the need for periodic renewals.

The consensus among panelists is that a straightforward extension is the most politically viable option, though zone redesignation is also gaining traction. Making OZs permanent would be a significant policy shift and faces steeper legislative hurdles.

Challenges in Passing an OZ Extension

While there is bipartisan support for Opportunity Zones, there are still political and procedural challenges that could delay or complicate an extension.

House Republicans passed their 2025 budget resolution, which proposes $4.5 trillion in tax cuts over 10 years. This lays the groundwork for a tax deal, but its provisions still need to be negotiated with the Senate.
Senate Republicans and moderate Democrats are debating spending levels, which could affect tax incentives like OZs.
House Ways and Means Committee Chairman Jason Smith wants a tax bill on the President’s desk by Memorial Day, but the panel believes this is overly ambitious given the complexities of tax reform.
A more realistic timeline for OZ legislation is late 2025, likely just before Congress adjourns for the holiday break.

There is also some uncertainty over whether an OZ extension will be part of a broader tax reform bill or introduced as a standalone measure. Panelists agree that inclusion in a larger bill increases its chances of passage.

Potential Policy Changes Under Consideration

Beyond a simple extension, several policy refinements are being discussed by lawmakers and industry advocates:

Fund of Funds Model – Allowing Qualified Opportunity Funds (QOFs) to invest in other QOFs, providing greater flexibility and diversification.
Expanded Eligibility for Non-Capital Gains – Some policymakers want to allow investors to use non-capital gains dollars in OZ investments, but this faces budgetary hurdles.
Stronger Reporting Requirements – Many policymakers support increased transparency, but reporting provisions may not be included in the upcoming tax bill due to legislative constraints of the budget reconciliation process.
Restoring the Step-Up in Basis Incentive – Lawmakers are considering reinstating the 5% and 10% step-up benefits for investors who hold OZ investments for at least five or seven years, though the holding periods might be adjusted.
Extending the Capital Gains Deferral Deadline – The current deadline requires investors to pay taxes on deferred gains in 2027. A proposed extension would push this to 2029, allowing more time for tax-deferred investments.
Reevaluating Opportunity Zone Census Tracts – Some areas designated as OZs have already experienced significant economic improvement. Lawmakers are considering removing or replacing certain tracts with areas that are still struggling economically.
Strengthening Rural Opportunity Zones – Lawmakers are considering expanding OZ designations in rural areas, improving incentives for broadband, infrastructure, and agriculture investments, and adjusting compliance rules to make long-term rural projects more viable.

While some of these reforms have broad support, panelists note that the political reality of tax legislation often means that only the simplest changes are likely to make it through Congress.

Advocacy Efforts to Support OZ Legislation

Both Emily and Peter stress that industry advocacy will be crucial in ensuring an OZ extension or reform package is passed. They encourage investors and fund managers to:

Engage with members of Congress – Personal outreach to legislators can make a significant difference.
Host site visits for policymakers – Showing lawmakers real OZ projects helps demonstrate their impact.
Share success stories publicly – Media coverage and testimonials can help build public and political support.

The Opportunity Zone industry must remain proactive to ensure the program continues beyond 2026.

Final Takeaways

OZ extension is highly likely, but its final form depends on tax negotiations.
Trump and Congressional Republicans strongly support the program, making renewal more likely.
Investors should prepare for possible policy changes, including extended deadlines, new OZ designations, and increased reporting requirements.
The industry must continue advocacy efforts to push for favorable legislative outcomes.

Trump’s 2025 Plans For Opportunity Zones Legislation