Program Objective:

The abatement is intended for commercial space and is available to all new construction and renovation projects. Commercial, community facility, manufacturing, or otherwise non-residential space, in a fully commercial building or for any portion of eligible space in a mixed-use building is eligible for ICAP benefits.

Tax Benefits and Duration:

The program offers a 15- or 25-year benefit period schedule which depends on a project’s location, proposed use, and if the project is a ground up or conversion. 

Savings are equal to the abatement base, which constitutes the difference in property tax payable for the building portion post completion of construction, and 115% of the property tax payable for the building portion prior to commencement of construction. The abatement will offset only increases in taxes applied towards the property within the initial 4 years of construction, starting from January 5 prior to commencement of construction. 

In each of the program tiers, there is a 100% exemption for the duration the bulk of benefit years, while the last few years are subject to a gradual phase out of benefits.

ICAP Requirements:

• A preliminary application must be submitted prior to the issuance of any construction permits

• At least 30% of the property’s taxable assessed value must be spent in construction.
• Manhattan Exclusion Areas: the following restrictions apply for certain areas of Manhattan:

• • Above 96th Street, all projects qualify for ICAP
  • Above 59 Street and below 96th street, no projects qualify for ICAP
  • Above Murray Street and below 59th Street, only conversion projects qualify for ICAP
  • In the Garment District, only renovation projects qualify for ICAP

• Below Murray Street, other than projects located in Exclusion Area 1 or Exclusion Area 2, new construction and renovation projects qualify for ICAP 

• Certain project located in Manhattan may only qualify for an 8, 10, or 12 year abatement. 

M/WBE and DLS:

If the expenditure on the project, or the portion thereof that is commercial applying for ICAP benefits reaches a threshold of $750,000, additional eligibility considerations including promotion of contracting opportunities for minority- and women-owned business enterprises (M/WBE) apply. If the expenditure is more than $2,500,000, promotion of contracting opportunities for Local Equal Employment Opportunity obligations set forth by the Division of Labor Services (DLS) is required.

Mixed Use Projects: 

ICAP benefits can only be applied to a tax lot in which no more than 20% of the floor area is dedicated to residential space. In the case where there is more than allowed residential space, an apportionment may be required for the purpose of separating the commercial space from the residential space.

ICAP Implementation:

The filing process spans from project planning stages, all the way to completion of construction. The final Notice of Completion is filed upon the issuance of the Temporary or Final C of O; at which point the DOF shall grant approval of eligibility, considering that all ICAP provisions have been complied with. Once a Certificate of Eligibility is obtained, the benefit shall appear to be in effect for the tax year indicated on the Certificate (the earlier of, either the tax year with a taxable status date immediately following the issuance of the Temporary or Final C of O, or, the tax year with a taxable status date being 5 years later than the taxable status date that precedes the issuance of the initial permit.)