Superfund Sites and Opportunity Zones

Using Opportunity Zone tax incentives to redevelop sites

EPA

Aerial view of Denver, Colorado, on a sunny day. Image shows a partial urban skyline, a construction crane, green spaces, public transportation and a small waterway spanned by bridges.
A group of a dozen people stand in a large, high-ceilinged central room with walls and architectural features painted blue and light blue. The building is in disuse. The image is part of an event marking a Birmingham Opportunity Zone groundbreaking.
A freestanding map of the United States and five U.S. territories with Opportunity Zones overlaid. The color of the land is light gray. The Opportunity Zones are solid and dark blue.
One-to-four story housing and newly planted trees are in the foreground, with trees and the Minneapolis urban skyline in the distance on a sunny day dotted with white clouds.

Can Superfund sites qualify for Opportunity Zone benefits?

A 10+ story brick building on a partially overcast day. The perspective is from someone standing at the base of the building facing the sky. The building is in disuse, some of the windows are broken, and outer window shutters are all opened in an outward position.

Superfund site property in an Opportunity Zone qualifies for tax benefits when the qualifying investment starts an “original use” on or “substantially improves” the property (doubles the basis in the property) in a specified timeframe. 

An “original use” on a Superfund site property means the site was significantly unused (defined as 80% of usable square feet of land or buildings are unused) for the past three years or significantly unused one year prior to the OZ being designated and through the date of acquisition.

An excavator works on top of mound of dirt, with large chunks of concrete debris in the foreground and trees and mountains streaked with snow in the background on a clear and sunny day.

A qualified entity that purchases real property located in an OZ from a local government that acquired the property through an involuntary transfer, such as a tax foreclosure, can treat the land and structures as meeting the eligibility criteria for the OZ tax benefits.