Ideal Hanalei Kauai Opportunity Zone Offering

5243 Weke Road, listed at $3,750,000, may be the ideal Opportunity Zone property currently offered in the North Kauai Opportunity Zone.

Weke Road rings Hanalei Bay

Located front and center, right in the heart of Hanalei Bay, and released to the market for the first time since the 980 sq ft island-style home was built in 1954, the under-improved 5243 Weke Road property should comply with the Sec 1400Z-2 Opportunity Zone provisions of the Internal Revenue Code.

5243 Weke Road features a 16,157 sq ft rectangular lot, listed for $3,750,000 MLS 623894

The Opportunity Zones Program

According to the IRS, over 8,700 Opportunity Zones in all 50 states were added to the US tax code as an economic development tool, designed to spur economic growth and job creation, by providing tax incentives to taxpayers. There are two certified Opportunity Zones on Kauai. The first zone includes north Kauai’s Hanalei and Ha’ena communities, and the second zone includes Kukui’ula and Koloa communities on the South Shore of Kauai.

Qualified Opportunity Fund

A taxpayer may defer paying tax on unrealized capital gains by investing those gains in a Qualified Opportunity Fund within 180 days of the sale or exchange of the shares or property. The tax payment is deferred until the earlier of:

  1. The date the investment is sold or exchanged, or
  2. December 31, 2026

Any taxpayer may create a Qualified Opportunity Fund for the purpose of investing in Opportunity Zones and the fund is self-certified by following IRS guidelines.

Hanalei-Ha’ena Qualified Opportunity Zone

The Qualified Opportunity Fund may choose to purchase the 5243 Weke Road property and retain the services of a local general contractor to improve the building and begin producing business rental income within 30 months, in order to comply with the applicable IRS Opportunity Zone provision, Sec 1400Z-2

If the taxpayer holds the investment in the Opportunity Fund for at least 10 years, the taxpayer is eligible for an increase in basis of the Opportunity Fund investment equal to its fair market value on the date that Opportunity Fund investment is sold or exchanged. No tax would be owing on the capital gain earned on the property’s appreciation. Please contact your tax specialist to verify.

The 5243 Weke Road island-style home was built in 1954. First time to market.

Weke Road Hanalei Sales

There have been seven $6,000,000+ sales on Weke Road since January 2018:

  • 5424 Weke Road sold for $15,000,000 on March 9, 2018
  • 5418 Weke Road sold for  $14,000,000 on March 9, 2018
  • 5242 Weke Road sold for $14,000,000 on January 11, 2018
  • 5480 Weke Road sold for $10,550,000 on February 7, 2018
  • 5514 Weke Road sold for $8,000,000 on March 2, 2018
  • 5486 Weke Road sold for $7,550,000 on February 7, 2018
  • 5395 Weke Road sold for $6,250,000 on March 16, 2018

The pretty community of Hanalei encompasses the iconic bay, where tourists mix with full-time and part-time residents, enjoying life the way it’s meant to be: slow and easy.

Hanalei to Ha’ena Opportunity Zone – Simply spectacular

Looking for Opportunity Zone property on Kauai? Contact me — Lori Decker, Kauai Opportunity Zone specialist.

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