As December 31 QOZ Tax Benefit Deadline Looms, Origin Investments Predicts Surge in Year End Real Estate Investing
CHICAGO, Dec 01, 2021 – (BUSINESS WIRE) – Top performing real estate investment manager Origin Investments sees investment in Qualified Opportunity Zone funds spike as 31st earns taxes. To meet demand, the company launched its Qualified Opportunity Zone Fund II in October after closing its hugely successful first QOZ Fund I. Fund II already has six apartment buildings in the pipeline.
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By investing capital gains in a QOZ fund on or before December 31, 2021, investors can enjoy three tax breaks. (Graphic: Business Wire)
“Investor appetite in opportunity zones has accelerated significantly this year for many reasons, but the biggest wave is imminent as the bonus tax cut on deferred capital gains expires on December 31,” said Origin Co-CEO Michael Episcope. “Unlike other private real estate firms who are still looking for attractive QOZ investment opportunities, we currently have $ 700 million worth of projects in our pipeline that represent some of the best development locations in the country.”
Since the 2017 Tax Cut and Employment Act created the Opportunity Zone program, QOZ funds have become an attractive option for investors looking to defer tax on their profits. The dollars back up this point: QOZ Funds raised $ 17.52 billion by the second quarter of 2021, up 15.5% from the total for 2020 as a whole, according to Novogradac, a nationally certified accounting firm, which among other things specializes in real estate tax credits.
3 benefits of QOZ investing through December 31, 2021
By investing capital gains in a QOZ fund on or before December 31, 2021, investors can benefit from three advantages: Your withholding tax liability can be deferred until December 31, 2026; you can reduce the tax liability on these original profits by 10%; and they can abolish taxes on any capital gains realized from the QOZ investment after a 10 year holding period. Some examples of assets that can be sold and the proceeds reinvested in a QOZ fund include stocks, real estate, a private company, precious metals, cryptocurrencies, and art.
The story goes on
“Investments in QOZ offers can be made after December 31st, but do not meet the five-year holding obligation declared before the 31st.
Origin QOZ Fund I closed in July 2021 and raised $ 265 million from more than 800 investors. With this level of investment, it was among the top 2% of the country’s largest QOZ funds, the Novogradac report concluded. In its QOZ Fund I, Origin currently has 11 apartment buildings with a total of around 3,700 units in various stages of construction with a total value of more than 846 million US dollars.
Origin’s QOZ fund strategy has resulted in top performance
Given the transaction pipeline and the reputation Origin has built since launching its first fund, the company already has six developments in the QOZ Fund II investment pipeline valued at approximately $ 700 million. Episcope attributes the robust level of activity of Origin’s second QOZ fund to the activity generated while searching for deals in its first QOZ fund. The acquisition team has been in the QOZ space for more than three years and sees every deal in its target markets.
“Since the introduction of QOZ Fund I, we have had one goal in mind – to make money for our investment partners. The tax break doesn’t matter if you’re not making a profit. So we don’t rate these opportunities any differently than a deal without the QOZ benefits, “added Episcope.
About Origin Investments: Origin Investments helps high net worth investors, family offices and registered investment advisors grow and preserve their wealth by providing world class real estate solutions. You are a private real estate manager who builds, buys, and leases multi-family home projects in fast growing markets in the United States. Since its inception in 2007, Origin has made more than $ 2.6 billion in real estate transactions and its principals have more than $ 60 million with investors. Origin prides itself on providing unparalleled service to investors, and its performance ranks the company in the top decile of top performing private real estate fund managers, ranked worldwide by Preqin, an independent provider of alternative investment data. Origin raised $ 265 million for its QOZ Fund I earlier this year. The company is currently accepting new investors for its open-ended IncomePlus, Multifamily Credit and QOZ II funds. To find out more, visit www.origininvestments.com.
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contacts
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