QOZ Substantial Improvement Test Calculator

QOZ substantial improvement requires doubling basis in 30 months.

Acquisition cost

Land allocation %

Planned capex

Months to completion

Improvement gap

Required improvement

$7,000,000

Test result

PASS

How the math works

Building basis = acquisition × (1 − land %). Required = building basis. Gap = required − capex.

$10M × 70% = $7M building basis. Need $7M capex. $8M planned = $1M excess. 24 mo < 30 mo PASS.

Editorial noteMaintained by EveryCalc - Reviewed June 2026

EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.

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How this calculator works

What this page estimates

This QOZ Substantial Improvement Test Calculator is built to give a quick, browser-based estimate for qoz substantial improvement test. QOZ substantial improvement requires doubling basis in 30 months. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.

Calculation approach

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Example workflow

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How to interpret the qoz substantial improvement test result

Best use

Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.

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Before relying on this qoz substantial improvement test estimate

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How to Use

Enter property acquisition cost.
Enter land allocation %.
Enter planned capex.
Enter months to completion.
Read improvement test result.

Frequently Asked Questions

What is substantial improvement?

QOZ rule requiring existing property acquired by QOZ fund to receive improvements equal to or greater than the building basis (excluding land) within 30 months of acquisition. Effectively doubles the building basis. Designed to ensure QOZ investment creates meaningful economic activity vs passive arbitrage. Ground-up construction automatically meets this (no prior basis).

How is basis calculated?

Acquisition cost allocated between land (not subject to doubling) and building (must be doubled). Typical allocation: 20-40% land, 60-80% building depending on market. Example: $10M acquisition, 30% land = $3M land, $7M building. Improvement required: $7M capex over 30 months. $3M land excluded from test.

Typical improvement plans?

(1) Value-add renovation: major systems, unit renovations, amenity upgrades. Works for apartments, offices, retail. (2) Structural overhaul: adding floors, changing use, reconfiguring layout. (3) Brand refresh: Fortune 500 TI for attracted tenant. Plan must be documented before 30 months end. Operators use engineering/cost reports to track and document compliance.

Consequences of failing?

Property disqualified from QOZ benefits. Deferred gains become immediately taxable. Tax penalties. Interest on delayed taxes. Loss of future 10-year exit benefit. Financial impact: typically $2-10M+ on mid-size deals. Extension possible for delays beyond sponsor control (weather, permit issues, supply chain) but limited. Track diligently.