Industrial & Commercial Abatement Program

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Industrial And Commercial Abatement Program (ICAP)

Note: Certificates of Continuing Use (CCU's) will not be required for the 2009/2010 Tax Year.

The ICIP program has been replaced by the ICAP program, signed into state law by Governor Paterson on June 30th, 2008 and signed into local law by Mayor Bloomberg on October 10th, 2008. The new state law is effective as of July 1, 2008.

For details as to eligibility for the old ICIP program for projects for which ICIP applications were made prior to July 1, 2008, see the state legislation that addresses these projects. Download Transition Legislation A11755/S8705).

The ICAP program provides abatements of real property taxes for varying periods up to 25 years for eligible industrial and commercial buildings that are built, modernized, rehabilitated, expanded, or otherwise physically improved.

Eligibility
Filing Requirements
Calculation of Abatement
Abatement Schedules
Deadlines
Forms & Applications
2007/2008 ICIP Exempt Properties
Contact Information
Additional Information

Eligibility

Location
To be eligible for benefits for commercial new construction, applicant may build anywhere in New York City except in Manhattan, south of the centerline of 96th Street and north of Murray, Frankfort, and Dover Streets.

To be eligible for benefits for commercial renovation, applicant may be expanding, modernizing, or otherwise improving an existing structure anywhere in the City except in Manhattan, between the centerline of 59th Street and the centerline of 96th Street. In Manhattan, benefits are available for renovation in three areas, although the benefits available depend on the area in which the project is located: the Garment Center District; an area in lower Manhattan bounded generally by Murray Street, South Street, Battery Place and West Street; and the remainder of Manhattan below 59th Street.

Expenditures
Applicants must make a minimum required expenditure (MRE) equal to at least 30 percent of the taxable assessed value of the project in the year of the issuance of the building permit or, if no permit is required, the start of construction. The MRE must be made no later than four years from the date of the issuance of the first building permit for the project, or, if no permit is require, the start of construction. ICAP also provides an additional tax abatement benefit for industrial construction projects that meet a higher MRE (40 percent).

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Filing Requirements

Applicant must submit two ICAP applications – a Preliminary Application for Certificate of Eligibility and a Final one.
Applicant must first submit Preliminary Application before obtaining a building permit, or, if no building permit is required for the construction, applicant must submit a notarized letter from the project's architect or engineer notifying the department of this fact within thirty calendar days of the commencement of construction. Please note that if you get your permit before you file your ICAP application you will get NO benefits.
Applicant must file a final application for benefits no later than one year from the date of issuance of the first building permit for construction work, or, where construction work does not require a building permit, no later than one year from the date of commencement of construction.
Applicant must file all income and expense statements for the property that are required by law.
Interim construction reports must be submitted to Finance semi-annually throughout the duration of the construction or renovation.

Limitations on Eligibility for Certain Types of Property

Utilities: No benefits are permitted for utility property, which includes all property used by a utility in the ordinary course of business, as well as land and buildings owned by a utility.
Retail: A property may be subject to varying abatement schedules, depending on the percentage of the property that is dedicated to retail purposes.

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Calculation of Abatement

Amount of the Abatement Base
The amount of the abatement base is generally the difference in tax liability imposed on the building or structure between two points in time, if the second tax liability exceeds the first tax liability by more than 15 percent.

The initial tax liability (point 1) is the liability for the building or structure on the tax roll with a taxable status date preceding the first building permit or commencement of construction if no permit is required. The post-completion tax (point 2) is the tax liability for the building or structure on the tax roll with a taxable status date immediately following the earlier of:

Completion of construction; or
Four years from the date of issuance of the first building permit or commencement of construction, if no building permit was required.

The abatement is equal to the amount by which the post-completion tax exceeds 115 percent of the initial tax. At no time during the benefit period may the abatement reduce the initial tax liability imposed on the building or structure nor may it reduce the amount of taxes imposed on the land portion of the assessment.

Projects that consist of industrial construction work or commercial construction work in areas designated as special commercial abatement areas may also be entitled to additional benefits during years two through thirteen of the benefit period (so-called “inflation protection”). Unlike the previous ICIP, the “inflation protection” is more generous for industrial construction work than otherwise qualifying commercial construction work. For work other than the industrial work, inflation protection is limited to increases that are above 5%. However, in both cases, the abatement base will not be increased by inflation protection if the taxable assessed value in any year increases by more than five percent as a result of a physical change (construction or alterations).

A more detailed description of the benefit calculation will be available shortly in a Finance Memorandum that will be posted on this website with a link from this page.

Additional Industrial Abatement
Notwithstanding the statutory provision that the abatement may not reduce the amount of the initial tax, industrial projects that meet a higher minimum required expenditure (40 percent rather than 30 percent) are also eligible for an additional abatement based on the initial tax. There is an abatement schedule of 12 years that coincides with the schedule for the abatement base described above that provides a maximum abatement of 50 percent of the initial tax in the first four years, declining every two years by 10 percentage points. These amounts are not subject to “inflation protection.”

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Abatement Schedules

Industrial: As noted immediately above, the additional industrial abatement based on the initial tax is granted for a 12 year period. There is a 25-year abatement schedule for industrial construction work and commercial construction work in special commercial construction areas, provided no more than 10 percent of the building or structure is used for retail purposes. In those cases where retail use exceeds ten percent, the excess retail space is subject to a 15 year benefit schedule.

Other Schedules

For commercial construction outside a special commercial construction area, there is a 15 year abatement schedule.
Renovation: There are two schedules for renovation work in Renovation areas of Manhattan: (a) in Lower Manhattan and the Garment District, there is a 12-year schedule; (b) for the Renovation area south of 59th Street, excluding the Lower Manhattan and Garment District areas, the schedule is ten years. The final schedule is an eight year benefit period for commercial construction work on new buildings or structures that meet certain statutory requirements in Lower Manhattan.

Benefit Schedules

ICAP Benefit Schedule (18k)
ICIP Current Schedule (36K)

Deadlines
The Preliminary Application must be filed before obtaining a building permit, or, if no permit is required, before starting construction. Under the law, ICAP applications filed after construction commencement or building permit issuance must automatically be denied.

The Final Application is filed within one year after the building permit is received.

Forms & Applications

Preliminary Industrial and Commercial Abatement Program
Preliminary ICAP Application and Instructions
Download Application (78k)

Final ICIP Application
Please use this application until it is replaced by the Final ICAP Application
Download Application (63k)

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2007/2008 ICIP Exempt Properties (Descriptive Data as of Final Roll 08/09) (Building Class Data as of Final Roll 08/09)	Adobe PDF	MS Excel
Manhattan	56k	150k
Bronx	60k	182k
Brooklyn	126k	435k
Queens	119k	440k
Staten Island	44k	134k