Owners of properties receiving benefits under the Industrial Commercial Incentive Program (“ICIP”) or its successor, the Industrial Commercial Abatement Program (“ICAP”), must file a Certificate of Continuing Use (“CCU”). The purpose of the CCU is to determine whether the property remains eligible to receive property tax benefits pursuant to ICIP/ICAP – namely, that the property’s use continues to be commercial or industrial.
If your ICIP/ICAP is part of a condominium tax lot, the filing should only include information for the tax lot receiving benefits under the respective ICIP/ICAP program. Additionally, if the ICIP/ICAP includes multiple tax lots, the CCU must be filed for each individual tax lot that receives ICIP/ICAP benefits. If this information is not fully and correctly submitted, you may jeopardize ICIP/ICAP your tax benefit.
ICIP
Those receiving benefits pursuant to ICIP, these CCUs must be filed with the Department of Finance (“DOF”) on or before January 5th of each year. The CCU filing recertifies the ICIP property tax benefit for the 2024/2025 tax year. The CCU for your ICIP property is due on or before January 5, 2024.
ICAP
For those receiving benefits pursuant to ICAP, owners must file their CCUs biennially. This year, properties receiving property tax benefits pursuant to ICAP must file their CCU on or before January 5, 2024. The CCU filing recertifies the ICAP property tax benefit for the 2024/2025 and 2025/2026 tax years. Note: utility properties that qualify under ICAP benefits must file biannually.
DOF requests the following information from the property owner as part of the biennial ICAP CCU filing: (1) Basic building information including the borough, block and lot, building class, tax class, address, ownership information; and the ICAP application number; (2) basic information regarding the filer; (3) applicant/ownership information; (4) whether there has been a change in the use, and if so, the year of the change and details concerning the change; (5) the current usage of the property; (6) the building usage for each floor; (7) attachments to support the filing; and (8) a certification attesting the truth of the submission.
Late Filings
The Department of Finance may terminate your ICIP/ICAP benefits if the property owner fails to file their CCU on or prior to January 5, 2024. However, any reinstatement of benefits will be applied retroactively.
WHAT IS THE INDUSTRIAL COMMERCIAL ABATEMENT PROGRAM (ICAP)?
ICAP provides an abatement in building real property taxes for new or renovated non-residential properties in New York City. Succinctly, the abatement covers the increase of building property taxes incurred during the period of construction and/or renovation at the property. The ICAP benefit ranges in duration, and at its maximum provides 25 years of abated real property taxes.
ICAP Preliminary Applications must be filed prior to the issuance of the initial building permit to be associated with the project. Preliminary Applications must also be filed prior to March 1, 2025. ICAP Final Applications must be filed within one year of the issuance of the initial building permit associated with the project.
Our firm has extensive experience drafting and submitting ICAP applications and documentation with DOF and advising clients with regard to compliance requirements with the New York City Division of Small Business Services.
Eligibility
The ICAP benefit is only available to commercial or industrial properties. It is not available to residential properties. Utility properties that are “peaking units” are potentially eligible for ICAP benefits as well.
ICAP eligibility is subject to certain geographic restrictions, including, in part:
- The ICAP benefit is available for commercial and industrial renovations throughout the City except between 59th and 96th street in Manhattan.
- New commercial construction projects are available everywhere except in Manhattan north of Murray, Frankfort and Dover streets, and south of 96th street.
ICAP benefits for new buildings are subject to certain geographic restrictions.
The ICAP-eligible construction project must spend at least thirty percent (30%) of the property’s taxable assessed value within four (4) years from the date of the issuance of the first building permit for the ICAP project.
Benefits do not commence until the completion of construction.
Hotel space may receive ICAP benefits. Residential space that is considered de minimis may be included as part of the ICAP, as well. Retail properties may be subject to a diminished ICAP benefit duration due to its usage. Self-storage facilities may not receive ICAP benefits.
Real Property Income and Expense (“RPIE”) statements, as well as the requisite CCUs, must be filed in order to receive ICAP benefits.
The Application Process
The ICAP Preliminary Application must be filed prior to the issuance of the first permit for the project. If work has already begun on the space that is to be subject to the ICAP, and no Preliminary Application was filed, the project will not be eligible for benefits.
The ICAP Final Application must be filed no later than the first anniversary of the date of issuance of the first initial permit relating to the project.
The ICAP Notice of Completion should be filed within 120 days after the taxable status date following completion of construction. Provided the project fully complies with all ICAP requirements, DOF will then provide a Final Certificate of Completion (“FCE”). Benefits will begin thereafter, as described below.
The Benefit
ICAP benefits commence the tax year following the January 5th after completion, or the tax year following completion four (4) years from the date of the first DOB construction permit for the project, whichever is earlier. Benefits range from 8 years to 25 years, depending on geography and usage, inclusive of the periods in which the respective ICAP benefit phases out.
There are additional, supplemental benefits for properties located in pre-determined tax blocks throughout the City. There is also a supplemental abatement for industrial properties, subject to some additional requirements.
**CONTACT US**
If you have any questions regarding ICAP or filing your CCU, please reach out to your BBG attorney of record or contact us here.
Written by: Zachary L. Nathanson, Administrative Department