New Jersey just drew the map for the next decade of Opportunity Zone investing. Governor Mikie Sherrill has submitted 130 census tracts for federal designation, the most permitted by law, in 60 municipalities across the state, including Newark, Jersey City, Camden, Trenton, and Atlantic City. Legacy city revitalization, transit-oriented development, and expanded housing access drove the selection.

According to a press release from the State of New Jersey’s Department of Community Affairs (DCA): “the Opportunity Zone program is a federal place-based tax incentive program that Congress made permanent last year. The program provides tax benefits for private investors who make long-term investments in real estate and operating businesses in qualifying low-income areas. Opportunity Zone designations last for ten years.”

The window to position is short. The new zones were federally approved on November 5, 2026, and the 10-year designations, along with the new OZ 2.0 rules, take effect January 1, 2027. Investors who identify sites, assemble capital, and line up gains now will be ready to invest when the new designations begin.

Why It Matters For Investors

In a statement, the Governor noted: “The federal Opportunity Zone program helps communities attract private investment to build more housing, strengthen local economies, and advance local priorities.”

The new tracts will be the first New Jersey zones under “OZ 2.0,” the permanent program enacted in the One Big Beautiful Bill Act (July 4, 2025). For eligible gains invested in a Qualified Opportunity Fund on or after January 1, 2027, the core benefits are:

• Rolling five-year deferral. Deferred gain is recognized five years after the investment date, or earlier if the investment is sold, rather than on a single fixed date.
• 10 percent basis step-up after a five-year hold, rising to 30 percent for qualified rural opportunity funds.
• Tax-free appreciation on qualifying investments held at least 10 years, unchanged from the original program.

New Jersey’s first-round record serves as a useful benchmark: 78 percent of the State’s zones received investment through 2024, totaling $3.14 billion, or an average of $18.6 million per eligible zone, according to the DCA’s statement. Existing first-round zones remain in effect through December 31, 2028.

The full list of census tracts submitted for federal designation is available via DCA’s Community Asset Map.

What To Do Now

• Map your pipeline. Check current and prospective New Jersey sites against the nominated tracts and flag any assets that sit in first-round zones but were not renominated.
• Time new gains. Gains invested on or after January 1, 2027 qualify for the new rolling deferral and 10 percent step-up; consider whether gains realized late in 2026 can be timed or structured to fit the new rules.
• Plan for the 2026 recognition date. Gains deferred under the original program are generally recognized at the end of 2026, so model that liability now.
• Watch for Treasury guidance implementing the new designations and for new QOF reporting rules ahead of the January 1, 2027 effective date.

For more information, please reach out to Aline S. Grossman or Lisa Lomelo.

This alert is for informational purposes and does not constitute legal advice.

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