A zero capital gains rate is a type of tax-preferred treatment for a particular activity or industry. It means that the profits or gains realized from the sale of an asset or property are not subject to taxation at the capital gains rate, which is the rate used to tax profits made from investments. This type of tax preference can be used to give a variety of incentives to different types of activities or businesses.

For enterprise zones, the 0% rate on the sale of property is used to encourage development and economic growth in areas that need it the most. These enterprise zones typically have higher than normal poverty levels, joblessness, and/or other economic distress. In order to take advantage of this tax incentive, the property owner must meet certain qualifications and requirements, which vary depending on the enterprise zone. Requirements may include having assets such as land, business interests, or assets located within the zone and holding onto these assets for a designated amount of time.

The zero capital gains rate is beneficial for businesses and individuals who are trying to develop or make investments in areas that need it the most. This type of tax incentive allows the investor or entrepreneur to realize the full value of their investments without the additional burden of taxation, allowing them to allocate their resources towards other areas. Additionally, it encourages foreign and local investments within these enterprise zones since the profits earned through investments are not subject to regular taxes.

In short, a zero capital gains rate entails no taxation on the profits or gains made from the sale of an asset or property, and is used to incentivize investments in special areas granted special status by a government. This type of tax preference can be beneficial to businesses and individuals hoping to develop or make investments in areas that need it the most, as it allows them to realize the full value of their investments without the additional burden of taxation.