Departments

Opportunity Zone Program

The Federal Opportunity Zone program encourages private investment in targeted, economically challenged areas by offering tax benefits to investors. These benefits include deferral, reduction, and potential elimination of capital gains taxes on investments made in designated Opportunity Zones. Opportunity Zones are delineated by U.S. Census Bureau tracts. The City of Augusta has one designated Opportunity Zone — the map can be downloaded here: Opportunity Zones | Office of Business Development


City of Augusta’s Qualified Opportunity Zone


The City of Augusta’s Qualified Opportunity Zone (QOZ) is defined by Census Tract 103, one of the city’s five Census Tracts. The boundaries of the zone are:


  • East: West bank of the Kennebec River
  • South: Northern side of Memorial Drive and Western Avenue
  • West: Municipal border with the Town of Manchester
  • North: Southern bank of Bond Brook



Recent Federal Updates
Investment Incentives
Frequently Asked Questions

Effective 2026-2027


The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, made the Opportunity Zone program a permanent part of the federal tax code and introduced several major changes that take effect beginning in 2026.


  • Program Permanency: Opportunity Zones will now continue indefinitely rather than expiring after 2026.


  • Re-Designation of Zones: Governors will propose new census tracts for designation in 2026, with certification by the U.S. Treasury. The new designations will take effect January 1, 2027, and remain active for ten years.


  • Qualified Rural Opportunity Funds (QROFs): A new category of funds designed to attract investment to smaller and rural communities (population under 50,000). QROFs provide a higher step-up in basis (30 percent rather than 10 percent) and reduce the required level of property improvement to 50 percent.


  • Rolling Five-Year Deferral: Investors will be able to defer capital gains on a rolling five-year basis rather than under a fixed deadline.


  • Enhanced Reporting: Opportunity Funds and participating businesses will be required to provide expanded reporting to the IRS, including investment amounts, job creation, and development data by census tract.


These reforms are expected to strengthen private investment in both urban and rural communities and expand the reach of the Opportunity Zone program in Maine.

  • Deferral of Capital Gains Tax: Investors can defer taxes on capital gains if those gains are reinvested in Qualified Opportunity Funds (QOFs).


  • Step-Up in Basis: Under the new rules, investors holding qualified investments for five years receive a 10 percent exclusion of deferred gain, with additional benefits for investments in Qualified Rural Opportunity Funds.


  • Permanent Exclusion: If the investment in a QOF is held for at least ten years, any additional gains accrued from the investment are exempt from capital gains tax.


Individuals and entities considering Opportunity Zone investments need to consult a qualified tax professional to understand eligibility, timing, and potential benefits under these federal provisions.

What Is an Opportunity Zone?

An Opportunity Zone is an economically distressed area in a community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones when nominated by the state and certified by the U.S. Treasury Department.


How Do Opportunity Zones Spur Economic Development?

Opportunity Zones are designed to encourage private investment by offering tax incentives that reward long-term holdings. These investments help stimulate job creation, housing, and business growth in designated areas.


How Were Opportunity Zones Created?

Opportunity Zones were established under the federal Tax Cuts and Jobs Act of 2017 and were permanently extended under the One Big Beautiful Bill Act in 2025.


How Do I Apply?

The Opportunity Zone program is a federal program administered through the U.S. tax code. The City of Augusta can help confirm whether a property is located within the city’s designated Opportunity Zone, but individuals need to consult a qualified tax professional to determine eligibility and the potential benefits of participating in the program.