Rules governing the Industrial and Commercial Abatement Program (ICAP) were adopted by the New York City Department of Finance on March 17, 2017.
The ICAP provides an abatement of real property taxes for the construction or improvement of certain industrial or commercial properties for most of New York City, except for certain areas in Manhattan. The ICAP can abate a portion of property taxes for up to 25 years, providing significant cost savings for eligible applicants undergoing construction and improvement projects throughout New York City. The rules provide further details on ICAP eligibility, process, and filing requirements.
One notable change that was included with the ICAP rules was the implementation of the following filing fees:
ICAP Preliminary Application for Certificate of Eligibility Fee: $150 Timing: The preliminary application must be filed before the issuance of the first building permit, or if no permit is required, the commencement of construction. ICAP Final Application for Certificate of Eligibility Fee: $500 The final application must be filed within a year from the date of the issuance of the first building permit, or if no permit is required, the commencement of construction. Notice of Completion (or ICAP Final Construction Report) Fee: $1,000 The Notice of Completion must be filed within 120 days of the taxable status date immediately following the completion of construction.
In addition to the filings above, there are other rules governed by the New York City Department of Small Business Services, Division of Labor Services, that require applicants to solicit bids from certified minority-owned or women-owned business enterprises (M/WBE) in order to be eligible for ICAP. Solicitation is required for projects of more than $1,500,000, and at least three certified M/WBE firms must be solicited for each contract or subcontract. The rules also provide clarity on eligible expenditures for the minimum required expenditure, definition/clarity regarding the first building permit, and examples demonstrating how to calculate the ICAP benefit.
It is important to note that current guidelines provide that the preliminary application deadline for ICAP benefits is March 1, 2019. This deadline has been extended historically and should be monitored closely. Therefore, work performed pursuant to a building permit first issued after April 1, 2019 shall not be included in the project.
Once the ICAP process is completed and approved, a Certificate of Continuing Use must be filed on or before the taxable status date (January 5) every other year during the ICAP period or else the ICAP benefit may be suspended or revoked.