Taxpayers who invest inside these zones are eligible to benefit from capital gains tax incentives. In essence, many U.S. investors and corporations have unrealized capital gains in stocks and funds, estimated by the IRS to be a combined $6.1 trillion. Many investors are reluctant to pull their money out of funds and stocks and invest in commercial and housing projects because they would have to pay large capital gains taxes.

But the new Opportunity Zones legislation allows them to defer a significant portion of that tax if they invest inside the zones. The money has to first flow through an Opportunity Fund. Investors can sell property or equity (real estate sold doesn’t have to be in an Opp-Zone) and invest in any Opportunity Fund they want.

If the investment in the Opportunity Zone is held for longer than five years, the investor only has to pay 90% of the deferred capital gain. If they hold it for more than seven years, the investor only has to pay 85% of the deferred capital gain. There are additional benefits to holding on for more than a decade.

Rachel Reilly of the Economic Innovation Group said communities need to implement rules to make sure that when investors pull their money out after five to 10 years, the community doesn’t lose out.