No Place Like (Opportunity) Zones: New Zones Across Florida Effective January 1, 2027

Published: April 8, 2026

In April 2026, the Internal Revenue Service (“IRS”) with the U.S. Department of the Treasury (“Treasury”) issued new guidance (Rev. Proc. 2026-12) outlining how states nominate census tracts—including rural areas—for designation as Qualified Opportunity Zones (“QOZs”). The intent is to stimulate long-term private investment and economic development. This guidance implements provisions of the One Big Beautiful Bill Act and represents an evolution of the Opportunity Zone (“OZ”) program.

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What are Opportunity Zones?

Opportunity Zones are economically distressed census tracts where investments may receive preferential tax treatment if made through Qualified Opportunity Funds.

Why The New Guidance Matters To Florida

Florida has been actively leveraging OZs since the program’s inception under the Tax Cuts and Jobs Act of 2017. With continued population growth, especially from 2020 onward, leading to additional infrastructure demand, the new guidance introduces opportunity to: (a) Reassess previously designated areas, (b) expand investment in rural communities, and (c) align QOZ designations with statewide and local economic development priorities.

The guidance provides further insight into what data was used to determine what tracts would qualify for designation in this new version of the OZ program.

The original program made use of the most recent full census, which at the time was 2010. Currently the most recent full census would have been conducted in 2020, but the guidance provides that the 2020-2024 American Community Survey (smaller scale data collection and population estimates conducted in-between the Census) was used in determining what tracts qualified and whether or not they would be considered rural. This can cause a major shift for a state like Florida that has seen a population explosion in the 2020-2024 period, causing tracts that may have otherwise qualified for the favorable rural classification under the 2020 Census to be classified as non-rural

The appendix to the IRS and Treasury guidance identifies 1,359 census tracts in Florida as low-income communities eligible for designation as a QOZ. However, there is an opportunity to appeal the classification of a census tract if the state believes it should qualify for a classification not given in the guidance.

Key Changes Impacting Florida

The effective date for the new zones is January 1, 2027. Florida’s governor is responsible for submitting nominations, beginning July 1, 2026. The nomination period will last 90 days with the potential for a 30-day extension. (Future redesignations will occur every 10 years.)
The 1,359 census tracts identified by the IRS and Treasury qualify for nomination. A maximum of 25% of the identified tracts may be selected as QOZs.
This introduces a shift in the potential for development across the state, as this focus has historically been on coastal versus rural areas.

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How is a qualified rural opportunity zone defined?

Per IRS guidance, qualified rural opportunity zones include (1) locations outside cities with populations less than 50,000 and (2) areas not adjacent to major urban areas, such as a large city (i.e., Orlando). In Florida this could include communities in parts of Central Florida outside major metros, the Lake Okeechobee region, and the Panhandle. Only 284 of Florida’s potential QOZs meet the additional requirements to be considered a qualified rural opportunity zone.

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The updated rules make rural OZs more attractive to investors. For example, there is a lower improvement threshold, reduced from 100% to 50% of a property’s basis. There may be additional tax advantages tied to long-term investment. For Florida, this could result in development in areas where project economics have historically been challenging, resulting in the potential for job creation, infrastructure improvements, and economic growth.

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What is the impact of the change in the improvement threshold?

Prior to this guidance, to receive tax benefits in an OZ, an investor had to “substantially improve” a property by doubling its basis within any 30-month period. Under the new rule, for property located in a QOZ comprised entirely of a rural area, the required investment is reduced to 50% of the original adjusted basis within the same 30-month period.