New Orleans Redevelopment Fund has launched its latest real estate investment initiative designed to provide tax benefits to investors with capital gains while helping fight blight in the area.
The NORF 3 Opportunity Zone Fund wants to raise $30 million, a news release said. It would be the largest fund to date for NORF, a private real estate developer founded in 2013 that specializes in the adaptive re-use of historic buildings and urban infill.
The Opportunity Zone program provides tax incentives for investors to re-invest capital gains into funds that promote development in economically distressed areas of the United States.
The program offers deferral of the original capital gains tax until 2026 if gains are invested within 180 days of sale; reduction of 15 percent for the original capital gains tax if gains reinvested in an Opportunity Fund are held for seven years; and permanent exclusion of capital gains for gains accrued after investing in an Opportunity Fund if the investment is held for 10 years. Key details of the NORF fund include sponsor commitment of 15 percent of the fund up to $4.5 million. Investors must be accredited and must have capital gains in need of deferral.