Hawaii Opportunity Zones Update: 25 Census Tracts Certified Under OZ 2.0 Program

Governor Josh Green announced the State of Hawaii’s 25 census tracts certified under the ten-year federal Opportunity Zones 2.0 program will include Lahaina Front Street. While not originally eligible, the state received designation for Lahaina’s Front Street through the U.S. Department of Treasury appeal process.

According to James Kunane Tokioka, director of the Department of Business, Economic Development and Tourism, the Opportunity Zones 2.0 program puts Hawaii on the map for investors looking to make a lasting difference. The state selected census tracts based on three key priorities: housing, clean energy and a more resilient economy.

Hawaii Designated Opportunity Zones 2.0 Census Tracts Certified by the U.S Department of the Treasury

19 OZ 2.0 census tracts are located on Oahu, four on Hawaii Island and two on Maui, including the Lahaina Front Street census tract. Kauai census tracts were not eligible for the designation. According to the governor’s office press release, the Kauai census-level data was unavailable to seek an appeal.

Kauai Ineligible for OZ 2.0 – OZ 1.0 Program Still Available

Kauai census tracts were not eligible for OZ 2.0 designation under the U. S Treasury’s OZ 2.0 rules as set out in The One Big Beautiful Bill Act passed in July 2025 and recently renamed Working Family Tax Cuts. Therefore, the opportunity to invest capital gains from the sale of real estate, stocks, and a business on Kauai is limited to IRS-designated OZ 1.0 property for a shorter time period.

Kukui’ula Kauai: OZ 1.0 Investment Opportunity

Kukui’ula is a 1,000-ac private resort community located on Kauai’s south shore and has flourished in part due to the ten-year OZ 1.0 program established under The Tax Cuts and Jobs Act of 2017 which created tax incentives for investors to invest capital gains from the sale of real estate, stock and businesses in 8,700 Opportunity Zone real estate and businesses across the country.

OZ 1.0 investors purchased vacant homesites and completed custom homes in Kukui’ula, and have been operating OZ 1.0 businesses.

There are currently Kukui’ula 17 vacant homesites available with list prices from $700,000 for a 12,160 sqft garden view lot in the Kaimalino Neighborhood to $4,875,000 for an 1.63 ac oceanside homesite in the Kula Makai Neighborhood.

Seven-Day Vacation Renting Permitted In Kahela Neighborhood

7-Day vacation renting is permitted in the three-tiered 17-homesite Kahela Neighborhood which makes for an attractive OZ 1.0 business with significant appreciation potential. If the improved OZ 1.0 business property is held by the investor for 10 years, it’s my understanding the appreciation when that property is sold is tax-free.

.61 ac Kahela Homesite 16 would make the perfect OZ 1.0 investment property. The homesite sits on the top tier of Kukui’ula’s gated Kahela Neighborhood, offers sweeping coastline and ocean views, and was recently listed by Hawaii Life for $2.100,000. Neighboring homes have been built and coastline views to Kukui’ula Harbor are set. Bring an architect. The ground is ready.

December 31, 2026, is an OZ 1.0 Deadline an Informed Investor Would Not Want to Miss

Schedule time to discuss your capital gains investment options with your financial advisors and determine if investing capital gains in qualified OZ 1.0 property at Kukui’ula Kauai works for you and your family.