Qualified Opportunity Zone "2.0" Update
Issue Date: May 15, 2026
The “One Big Beautiful Bill Act” enacted in July 2025 renewed and made permanent an updated Qualified Opportunity Zone program – “QOZ 2.0” – with several important changes. While the original program – “QOZ 1.0” – remains in effect for existing investments and investors through 2047 (with the new investment window closing on December 31, 2028), QOZ 2.0 and its new Zones and rules for new investments will be in effect starting on January 1, 2027.
The IRS has provided guidance to states on the nomination process for new Zones. NAR encourages REALTORS® to participate in this process by engaging with their state and local associations, governments, and economic development organizations to provide their expertise during the Zone nomination process, which formally begins July 1, 2026. Please note, however, that most states will begin the vetting process ahead of that date. REALTORS® are experts in their communities and markets, and have unique insights they can provide to improve which Zones are nominated and thus help make the program a bigger success.
To help REALTORS® understand the key differences between the two OZ programs, NAR has compiled a chart of their major differences and similarities, which you can find below.
A few points to note:
- Besides the guidance already released to states on the nominating process, the IRS is actively developing specific guidance for investors for QOZ 2.0, and NAR will update its resources for members as that guidance is finalized.
- QOZ 1.0 and QOZ 2.0 have a 2-year overlap period from January 1, 2027 through December 31, 2028, during which the OZ 1.0 investment tracts remain valid and continue to qualify for investment benefits. During this period, investors should have the opportunity to choose between the 1.0 and 2.0 tracts, depending on final guidance. However, the QOZ 2.0 program is expected to have 25% fewer overall Zones than QOZ 1.0. Moreover, the new rural zones with enhanced tax benefits are only available with the 2.0 version.
- For more in-depth information about QOZ 1.0, visit NAR’s “Qualified Opportunity Zone Toolkit.”