Are Opportunity Zones still in effect in 2026?

Yes! Opportunity Zones are still in effect in 2026, and the program is now on a permanent footing due to the enactment of Opportunity Zones 2.0 in 2025. However, 2026 is a transition year, with important distinctions between the original Opportunity Zones regime (OZ 1.0) and the new OZ 2.0 framework.

Understanding which rules apply (and when) is critical for investors, fund managers, and developers.

Key Deadlines and Remaining Benefits

Opportunity Zones are still active in 2026.

Opportunity Zones 1.0 remains active through 2026

For eligible gains deferred into Qualified Opportunity Funds through year-end 2026, the original Opportunity Zones 1.0 regime continues to operate.

Key points for 2026:

  • Capital gains realized in 2026 may still be invested into a Qualified Opportunity Fund (QOF) within the applicable 180-day window.
  • Investors who make qualifying investments in 2026 can still achieve tax-free appreciation on the QOF investment if it is held for at least 10 years.
  • The mandatory gain recognition date for OZ 1.0 deferrals remains December 31, 2026.

Some earlier OZ 1.0 benefits — such as the 10% and 15% basis step-ups tied to five- and seven-year holding periods — are no longer available for new investments, but the core incentive of long-term gain exclusion is still intact.

What changes with Opportunity Zones 2.0?

Opportunity Zones 2.0 fundamentally reshaped the program by making it permanent as a matter of tax policy, while moving to a decennial zone designation model.

Key structural changes:

  • Opportunity Zones are no longer a one-time perishable map.
  • New Opportunity Zone designations will occur every 10 years, beginning with the first OZ 2.0 designation cycle taking effect on January 1, 2027.
  • Each newly designated Opportunity Zone remains active for 10 years.

In other words, the policy is permanent, but the geography is not.

The 2026–2027 transition period

The year 2026 sits at the intersection of OZ 1.0 and OZ 2.0.

Important dates:

  • July 1, 2026 – Window opens for OZ 2.0 eligible tracts to be nominated for Opportunity Zone designation.
  • Summer and Fall 2026 – Treasury designates new Opportunity Zones from states’ nominated tracts.
  • January 1, 2027 – Newly designated OZ 2.0 census tracts officially take effect.
  • December 31, 2028 – Original 2018-designated Opportunity Zones expire.

This creates a two-year overlap period (2027-2028) where OZ 1.0 Opportunity Zones remain valid, and new OZ 2.0 zones are also active.

What does this mean for investors in 2026?

For investors with eligible gains in 2026, there are two distinct paths. Note, that the 180-day timeline must be adhered to. Typically, a taxpayer has 180 days from the date of the transaction to rollover capital gains into a Qualified Opportunity Fund (QOF). Gains from passthrough entities or installment sales may have additional options as to when the 180-day clock begins. Read our article on the 180-day rule for additional information.

  1. OZ 1.0 benefits apply to eligible gains deferred into QOFs through year-end 2026. Capital gains from 2026 or earlier that are invested into QOFs through year-end 2026 receive OZ 1.0 tax benefits:
    • In 2026, the deferral is effectively no longer available.
    • In 2026, the basis step-up is no longer available.
    • In 2026, long-term appreciation remains eligible for full exclusion if the QOF investment is held for 10 years.
  2. OZ 2.0 benefits apply to eligible gains deferred into QOFs beginning January 1, 2027. Capital gains from 2026 or later that are invested into QOFs on or after January 1, 2027 receive OZ 2.0 tax benefits:
    • A deferral period of 5 years, starting on the date of investment into the QOF.
    • A basis step-up of 10% at the 5-year mark (30% for investments in rural QOFs).
    • Appreciation on the QOF investment itself is permanently excluded from capital gains tax if the QOF investment is held for 10 years.

Conclusion

Opportunity Zones are very much still in effect in 2026.

  • The original program remains active for new investments through the end of the year.
  • The Opportunity Zones policy is now permanent, with new designations rolling out every decade.
  • 2026 is a pivotal transition year that bridges OZ 1.0 and OZ 2.0.

Investors who understand the timing and structural differences between the two regimes will be best positioned to take advantage of the Opportunity Zones program, both now and in the years ahead.