California’s Opportunity Zone 2.0 map designates 620 census tracts in 55 counties, effective January 1, 2027, according to the California Department of Finance, and for property a fund acquires after December 31, 2026 those tracts are where it can generally qualify, with the land-and-building allocation in a cost segregation study setting, for an existing building, the basis the substantial-improvement test is measured against.
The map matters to a cost segregation plan for one reason: the depreciation inside an Opportunity Zone deal is only kept, rather than recaptured, when the property qualifies and the investor holds the qualified opportunity fund interest for at least 10 years, makes the §1400Z-2(c) election and sells that interest. A property that sits outside the new map, bought after the cut-off, is an ordinary real estate deal with ordinary recapture, unless a Notice 2026-40 section 5.01 exception applies.
What is on California’s Opportunity Zone 2.0 map?
The Department of Finance reports that Treasury approved Governor Newsom’s nomination of 620 tracts in fall 2026, covering an estimated 2.6 million people in the 55 counties that had at least one eligible tract. Under OZ 2.0 the Governor could nominate up to 25 percent of the 2,479 eligible tracts, with Treasury making the final designation. The new tracts become Opportunity Zones on January 1, 2027 and are scheduled to run ten years, until the next round of designations.
Our count of the Department of Finance’s designated-tract list, read November 1, 2026:
- Los Angeles County: 201 tracts, about a third of the state’s total.
- San Diego 41, San Bernardino 34, Riverside 28, Sacramento 27.
- Alameda 26, Kern 26, Fresno 25, Santa Clara 19, Contra Costa 16.
- San Francisco 14, Orange 13, Tulare 13, San Joaquin 12, Ventura 10.
- The remaining 40 counties have between one and seven tracts each; 17 of them have exactly one.
Treasury’s CDFI Fund Opportunity Zones page still listed only the 2018 designations when we read it on November 1, 2026, so the state’s list is the published source for California today. Check a specific address on the state’s interactive OZ 2.0 map, or match the parcel’s 11-digit census tract number against the designated list.
How were the California tracts chosen?
The Department of Finance scored all 2,479 eligible tracts on poverty, median family income, rent burden (renter households paying 35 percent or more of income in rent), crowding and unemployment, using the Census Bureau’s 2020–2024 American Community Survey. GO-Biz evaluated 1,232 local recommendations for development readiness. An initial list of 560 tracts went out for public comment on August 3, 2026, drew 3,754 comments on 863 tracts through August 28, and became the final list of 620.
For a sponsor, the practical point is that the selection weighted economic need, housing strain in particular. So housing projects are a natural fit for the new tracts, and a cost segregation study on a residential rental building typically moves part of the basis into 5- and 15-year property (a planning expectation, not a promise).
Which map governs a California property bought around January 1, 2027?
Which map governs turns on when the fund or its business acquires the property. Property acquired on or before December 31, 2026 in a 2018 tract is tested under that designation, which runs through December 31, 2028 (Rev. Proc. 2026-14, section 2.02(2)(c)). Property acquired after December 31, 2026 generally qualifies only if it is acquired for use in a zone designated after July 4, 2025, unless an exception in Notice 2026-40, section 5.01(2) or (3), applies (the 2027 Opportunity Zone map deadlines; how OZ 2.0 changes cost segregation).
- A 2018 California tract that is also on the 2.0 map: new acquisitions can qualify on either side of January 1, 2027, under the designation in force when the property is acquired.
- A 2018 tract that did not make the 2.0 map: December 31, 2026 is the last date to acquire new qualifying property there, apart from the two exceptions (what sponsors face when a tract does not make the 2027 map).
- A tract that is new on the 2.0 map: property acquired for use there qualifies from January 1, 2027, not before.
How does the California map change the cost segregation math on an OZ deal?
A cost segregation study moves part of a building’s basis into 5-, 7- and 15-year property, and for qualified property acquired after January 19, 2025, 100% bonus depreciation can expense that portion in the year it is placed in service. Outside an Opportunity Zone, those deductions are largely a timing benefit: a taxable sale recaptures the depreciation on the 5- and 7-year property as ordinary income under §1245, recaptures depreciation above straight-line on 15-year land improvements, including bonus, as ordinary income under §1250, and taxes unrecaptured §1250 gain on the building at up to 25 percent.
Inside a qualifying zone, after a 10-year hold, the §1400Z-2(c) election on a sale of the qualified opportunity fund interest steps the basis up to fair market value, so the recapture that would normally follow does not arise at that exit. A sale before year 10 recaptures normally, and the fund selling the property is a different transaction with its own election. That is why the tract a California property sits in decides whether its accelerated depreciation is kept or borrowed (how cost segregation and Opportunity Zones work together).
The study also carries the number the qualification test needs. An existing building bought for a qualified opportunity fund must generally be substantially improved: additions to basis over 30 months that exceed its adjusted basis, or 50 percent of it for property in a zone comprised entirely of a rural area (IRC §1400Z-2(d)(2)(D)(ii)). Land is excluded from that test, so the land-versus-building allocation decides how large the improvement budget has to be.
Does California follow the federal Opportunity Zone and bonus depreciation rules?
California has not conformed to the federal Opportunity Zone deferral and exclusion, or to federal bonus depreciation, as of our reading on November 1, 2026 (FTB Publication 1001; EY tax alert, November 2025). On a California return, the deferred gain is taxed as usual, the 10-year exclusion does not apply, and bonus depreciation taken on the federal return is added back on a California personal income tax return (individuals and pass-through owners), with the reclassified property depreciated over its MACRS recovery period instead. For California personal income tax, a cost segregation study still shortens those lives, so it still accelerates the state deduction, just more slowly than on the federal return.
The California designation is therefore a federal benefit for a California property. A California sponsor’s investors who are California residents still owe California tax on the gain they roll in. The federal model and the California model should be run separately.
Frequently Asked Questions
How many Opportunity Zone 2.0 tracts does California have?
California has 620 Opportunity Zone 2.0 tracts in 55 counties, effective January 1, 2027, according to the California Department of Finance, which reports that Treasury approved the Governor’s nomination in fall 2026; Los Angeles County has 201 of them.
When do California’s new Opportunity Zones take effect?
California’s OZ 2.0 tracts become Opportunity Zones on January 1, 2027 and are scheduled to run ten years, while the 2018 tracts remain designated through December 31, 2028 (Rev. Proc. 2026-14, section 2.02(2)(c)).
Can a cost segregation study be done on a property in a California Opportunity Zone?
A cost segregation study can be done on any depreciable building, and in a qualifying zone, after a 10-year hold and with the §1400Z-2(c) election on a sale of the fund interest, the federal recapture on the accelerated depreciation is excluded at that exit; a sale before year 10 recaptures normally.
Does bonus depreciation from a cost segregation study apply on the California return?
California had not conformed to federal bonus depreciation as of our reading on November 1, 2026 (FTB Publication 1001), so bonus depreciation from a cost segregation study is added back on a California personal income tax return and the reclassified property is depreciated over its MACRS recovery period there instead.
How do I check whether a California property is in an OZ 2.0 tract before a cost segregation study?
Enter the address on the Department of Finance’s interactive OZ 2.0 map, or match the parcel’s 11-digit census tract number against the state’s designated-tract list; for the 2018 tracts, Treasury’s CDFI Fund mapping tool remains the reference.
If a California property is in, or near, a tract on the new map, see whether a cost segregation study fits it.
