Colorado Opportunity Zone Program
Program Summary
The Colorado Opportunity Zone Program (OZ) is a federal incentive that encourages long-term private investments in designated low-income communities by giving investors tax benefits for investing in real estate projects and operating businesses. Investors receive tax incentives in the form of deferral and elimination of state and federal capital gains taxes.
The first iteration of the Colorado Opportunity Zone Program benefits is sunsetting in December 2028. OEDIT continues to be available to answer questions and provide information to support communities, project sponsors, and investors to help them make the most of the incentive and the current Opportunity Zone designations.
Federal bill H.R. 1 was signed into law in July 2025, making the Colorado Opportunity Zone Program permanent and updating the associated eligibility requirements, benefits, and other aspects of the program. In accordance with the updated requirements, OEDIT is embarking on a multi-month process to support the Governor in nominating up to 25% of Colorado’s low-income census tracts to be opportunity zones. We are engaging local governments, economic development organizations, and other community leaders, as well as the public at large, to ensure the State’s nominations match local priorities.
More information on the new statutory requirements and benefits of the second iteration of the Opportunity Zone program, as well as our designation process and timeline, can be found under the first subsection of this webpage. Please sign up for our email updates via the form below to ensure you receive updated information on an ongoing basis.
Some census tracts that were designated under the first iteration of the Colorado Opportunity Zone Program will be eligible for redesignation in the second iteration of the program. While the originally designated zones will sunset in December 2028, investors may hold their investments and still receive the benefit of elimination of capital gains tax obligations on the Opportunity Zone investment.
OEDIT has historically supported the Colorado Opportunity Zone Program by:
- Coordinating the designation of the zones in 2018.
- Hosting in-person and virtual events to educate investors, community leaders, developers, and other stakeholders.
- Helping businesses in opportunity zones secure investment through the Opportunity Zone Capital Accelerator Program.
- Providing technical support grants to help early-stage projects attract investment.
We are proud to have played a role in the Colorado Opportunity Zone Program’s substantial impact across the state. To learn more, check out the following articles and reports that gauge the impact and lessons learned from the past several years:
- Denver Business Journal: “59 projects and $1B in investment: The story of Colorado’s Opportunity Zone program”
- The Colorado Sun: “Five years in, Opportunity Zone investments in Colorado are yielding important dividends"
Overview
Type: Program
For: Communities, businesses, and investors
Current zone designations: Through 2028
OEDIT division: Business Funding and Incentives
In accordance with the updated OZ requirements, OEDIT is embarking on a multi-month process to support the Governor in nominating up to 25% of Colorado’s eligible low-income census tracts to be opportunity zones. We are engaging local governments, economic development organizations, and other community leaders, as well as the public at large, to ensure the State’s nominations match local priorities.
Eligible Opportunity Zones in Colorado
As we await the U.S. Treasury’s release of the official list of low-income tracts eligible for designation in the second iteration of the OZ program, the Economic Innovation Group has created a preliminary and unofficial map of eligible census tracts based on 2020-2024 American Community Survey 5-Year Estimates. This interactive map can be used to determine where the eligible tracts are likely to be in Colorado. The state of Colorado may recommend up to 25% of eligible tracks for designation as Opportunity Zones.
Upcoming Engagement Opportunities
Check back here soon or sign up for our OZ newsletter (at the bottom of the webpage) for more information on upcoming engagement opportunities.
Past Webinars
- Opportunity Zones 101 (November 2025): A comprehensive review of the OZ incentive, with a greater emphasis on the substance, including the changes from H.R.1, and a lesser emphasis on the OZ selection process and next steps.
- Colorado’s Opportunity Zone 2.0 Selection process (November 2025): A high-level overview of the OZ incentive and a more detailed look at the planned OZ selection process and next steps in Colorado.
- Speaker Series: Preparing for Colorado Opportunity Zone Investment (December 2025): Join Kenan Fikri, Senior Fellow with the Economic Innovation Group, and Stephanie Copeland, Partner and Chairman of Colorado's own Four Points Funding, to learn how to maximize the investor and community benefits of the second iteration of the Opportunity Zone Program.
- Speaker Series: Strategic Tax Planning for Opportunity Zone Investment (January 2026): Join Trinity Bradley-Anderson, Tax Partner at Sorren, for technical insight on Opportunity Zone real estate investments.
Opportunity Zones Selection Process Timeline
The exact timing of Colorado’s OZ selection process depends on the U.S. Treasury’s release of the official list of eligible low-income tracts. Below you will find a tentative timeline for OEDIT activities related to the selection process:
- Fall 2025-Spring 2026: Educational webinars provided at various stages in the process, with the ultimate goal of encouraging local feedback on zone designation.
- Spring 2026: Regional convenings provided at various stages in the process, with the ultimate goal of encouraging local feedback on zone designation.
- Spring 2026: Dependent on the U.S. Treasury’s release of the official list of eligible low-income tracts, OEDIT will provide a public GIS tool mapping the eligible tracts and other relevant criteria, as well as a method for the public to submit their feedback on zone designation.
- Late Spring 2026: Deadline for providing feedback to OEDIT on zone designation.
July 1, 2026: Colorado nominations for new OZs due to U.S. Treasury.
January 1, 2027: New OZs made official.
Updates & Changes to the Colorado Opportunity Zone Program from H.R. 1
Federal bill H.R. 1 makes the Colorado Opportunity Zone Program permanent and includes several other key changes:
- Makes the OZ program permanent: H.R. 1 makes the OZ incentive permanent and requires that OZs be redesignated every 10 years as eligibility data is updated.
- Creates new reporting requirements: H.R. 1 creates new reporting requirements for Qualified Opportunity Funds and directs the U.S. Treasury to publish annual reports on OZ investment activity and outcomes, providing greater transparency around the impact of the program.
- Introduces a new incentive structure: H.R. 1 simplifies the incentive structure with a five-year rolling deferral starting on the date of investment, coupled with a 10 percent step up in basis for investments held for five years.
- Establishes new eligibility criteria:
- Defines low-income communities as census tracts that have either 1) a median family income below 70% of the state (for non-metro areas) or metro (for metro areas) median or 2) a poverty rate of 20% or greater plus a median family income below 125% of the state or metro median.
- Eliminates the “contiguous tracts” exception from the first iteration of the program.
- Enhances the incentive for investment in rural OZs:
- Defines a “rural area” as any area other than 1) a city or town with a population of greater than 50,000 and 2) an urbanized area adjacent to a city or town with a population in excess of 50,000.
- Provides a 30 percent step-up benefit for investments in a rural OZ.
- Reduces the “substantial improvement” threshold for qualifying projects in rural OZs from 100% to 50%.
For more detailed information on the changes and impacts of H.R. 1, the Economic Innovation Group has published an in-depth review: Opportunity Zones 2.0: Where Things Stand After the One Big Beautiful Bill Act.
Opportunity Zones in Rural Areas
The U.S. Treasury recently released guidance around the H.R. 1 definition of rural areas that applies to opportunity zones that will be designated under the second iteration of the program as well as existing opportunity zones that are currently open for investment. A rural area is now defined as any area other than a city or town with a population greater than 50,000, and any urbanized area contiguous and adjacent to a city or town with a population greater than 50,000.
As noted above, there is a reduced substantial improvement requirement for opportunity zones located in rural areas as defined by H.R. 1, and, importantly, this reduced requirement is now available for investments made in existing opportunity zones. According to the U.S. Treasury’s guidance, the following opportunity zones under the first iteration of the program meet the new rural definition. Review the IRS Notice 2025-50 for more information.
| County | Census Tract Number - OZ 1.0 |
|---|---|
| Adams | 08001008606 |
| Alamosa | 08003960200 |
| Alamosa | 08003960300 |
| Alamosa | 08003960000 |
| Archuleta | 08007974400 |
| Baca | 08009964700 |
| Bent | 08011966700 |
| Chaffee | 08015000401 |
| Chaffee | 08015000402 |
| Cheyenne | 08017960600 |
| Clear Creek | 08019014800 |
| Costilla | 08023972600 |
| Crowley | 08025969600 |
| Delta | 08029964600 |
| Delta | 08029964800 |
| Delta | 08029965100 |
| Dolores | 08033000100 |
| Eagle | 08037000503 |
| Fremont | 08043978800 |
| Fremont | 08043978300 |
| Fremont | 08043978200 |
| Garfield | 08045951702 |
| Garfield | 08045951600 |
| Garfield | 08045951901 |
| Gunnison | 08051963700 |
| Huerfano | 08055960600 |
| Kit Carson | 08063962100 |
| La Plata | 08067940400 |
| La Plata | 08067971100 |
| Lake | 08065961900 |
| Larimer | 08069002802 |
| Las Animas | 08071000200 |
| Las Animas | 08071000500 |
| Las Animas | 08071000800 |
| Lincoln | 08073961700 |
| Logan | 08075966300 |
| Logan | 08075966100 |
| Logan | 08075966400 |
| Mesa | 08077001800 |
| Moffat | 08081000400 |
| Montezuma | 08083941100 |
| Montrose | 08085966100 |
| Montrose | 08085966202 |
| Montrose | 08085966503 |
| Montrose | 08085966300 |
| Morgan | 08087000700 |
| Morgan | 08087000500 |
| Otero | 08089968300 |
| Otero | 08089968600 |
| Phillips | 08095967600 |
| Prowers | 08099000300 |
| Prowers | 08099000700 |
| Prowers | 08099000200 |
| Rio Blanco | 08103951100 |
| Rio Grande | 08105976700 |
| Saguache | 08109977700 |
| San Juan | 08111972600 |
| San Miguel | 08113968200 |
| Washington | 08121924200 |
| Weld | 08123002004 |
| Weld | 08123001902 |
| Yuma | 08125963100 |
The below information is in reference to the first iteration of the Colorado Opportunity Zone Program. Details on the second iteration can be found under the first subsection of this webpage.
Investors receive tax benefits when they reinvest capital gains, or profits from the sale of an asset, into opportunity zones. Investors may benefit in three ways.
- They can defer paying taxes on the original capital gain until they dispose of the investment or until 2026, whichever comes first.
- If they hold the investment for at least ten years, they will not have to pay any capital gains tax on their opportunity zone investment.
For example, assume an investor sells their company stock for $1 million and has $100,000 in capital gains from that sale. The investor puts the $100,000 into an opportunity zone fund that invests in a new business in an opportunity zone.
The investor can defer paying capital gains tax until they have disposed of the opportunity zone investment or December 31, 2026, whichever comes first.
If they continue to hold the opportunity zone investment for at least 10 years, they will not have to pay any capital gains tax on that investment. If their $100,000 opportunity zone investment appreciates 100% over 10 years, they owe $0 in capital gains tax instead of $20,000. Investors can dispose of their OZ investment as late as 2046 and still get the benefit of eliminating taxes owed on the appreciation of the OZ investment.
The below information is in reference to the first iteration of the Opportunity Zone program. Details on the second iteration are forthcoming.
Areas highlighted in yellow are designated opportunity zones. If you use the search tool, you may need to zoom out to see if your location is located in a yellow zone.
The below information is in reference to the first iteration of the Colorado Opportunity Zone Program. Details on the second iteration can be found under the first subsection of this webpage.
Businesses will need to meet these qualifications to take advantage of this program.
70% of the business’ tangible property needs to be:
- Acquired after 2017 from an unrelated party.
- Used in any opportunity zone 70% or more of the time.
- Original use property or be substantially improved.
A business needs to:
- Get 50% of its revenue from active conduct in any opportunity zone.
- Use 40% or more of its intangible property in any opportunity zone.
- Not hold non-qualified financial property.
- Not operate a sin business.
You will also need to consider whether you are:
- Willing to give up equity in your business.
- Likely to grow significantly over the next 10 years.
- Likely to remain in a qualified opportunity zone for the 10 years.
The below information is in reference to the first iteration of the Colorado Opportunity Zone Program. Details on the second iteration can be found under the first subsection of this webpage.
Not all projects are a good fit for opportunity zones. We encourage communities to think about how this program fits into your existing economic development tools.
We recommend that communities:
- Be proactive – the best way to ensure that your community attracts the investment it would like is to make projects attractive and easy to find.
- Respond quickly – an OZ investment needs to occur before the end of 2021 for the investor to realize the full benefits.
- Think like an investor – focus on projects that will help investors realize a return.
- Layer additional programs and incentives.
Communities will need to follow this process to attract investment.
- Build community investment prospectuses. More information about this prospectuses opportunity can be found below this list.
- Structure deals.
- Work to engage investors.
The below information is in reference to the first iteration of the Colorado Opportunity Zone Program. Details on the second iteration can be found under the first subsection of this webpage.
Invest in Colorado
You don’t have to live, work, or have a business in an opportunity zone to invest there.
Qualified opportunity funds
A qualified opportunity fund specializes in attracting investors with similar risk and reward profiles to collect and place capital in rural and low-income urban communities.
Qualified opportunity funds:
- Need to be funded by private capital and guided by market principles.
- Need to invest 90% of their assets in opportunity zone assets.
- May invest in opportunity zones via stock, partnership interests, or business property.
- Need to use assets to create new business activity.
- Need to double the investment basis over 30 months if investing in an existing business.
- Can create new businesses or new real estate or infrastructure.
- May not invest in certain types of business like golf courses, country clubs, gambling establishments, and a few other specifically excluded types of business.
If you have realized capital gains, you need to invest your gains within 180 days into a qualified opportunity fund. Then the fund needs to place 90% of the funds into qualified opportunity zone property or business within six months.
The below information is in reference to the first iteration of the Colorado Opportunity Zone Program. Details on the second iteration can be found under the first subsection of this webpage.
When the U.S. Tax Cuts and Jobs Act of 2017 passed, the federal government asked each state and territory to nominate up to 25% of its low-income community census tracts to be opportunity zones. We consulted with mayors, county commissioners, and local economic development organizations to ensure that our state’s nominations matched local priorities.
A commission reviewed local submissions, and the governor submitted final 126 opportunity zone nominations to the federal government. The federal government certified Colorado’s opportunity zones in April 2018. Current opportunity zone designations are active for 10 years through 2028.
The following criteria defined how those zones were defined. Definitions used 2011-2015 American Community Survey data. Low-income community census tracts are defined as tracts which meets one of these criteria:
- Poverty rate is at least 20%.
- Median family income does not exceed 80% of the statewide median family income if located outside of a metropolitan area.
- Median family income does not exceed 80% of the statewide median family income or the metropolitan area median family income, whichever is higher.
Program Manager
