The regulations give you the option of using an aggregation approach for substantial improvement, meaning that if the improvement on one lot satisfies the requirement for both, you should be in pretty good shape.
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If I purchase two side by side lots that are both within a Qualified Opportunity Zone, does the substantial improvement criteria apply to each lot separately or overall?
For example, if one lot has a house and the other lot is vacant and I build a house on the vacant lot, would that qualify for substantial improvement since the lot with an existing structure would not be improved much?
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The regulations provide guidance for the aggregation, for example, see Reg. Sec. 1.1400Z2(d)-2(b)(4)(v): Aggregation of purchased buildings--(A) Substantial improvement requirement for eligible building group.
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