ICAP Statute Amended and Proposed Rules Released by NYC Department of Finance
The Industrial and Commercial Abatement Program (ICAP) is a New York City property tax incentive designed to encourage the construction, modernization, or improvement of industrial and commercial buildings by offering real property tax abatements for up to 25 years. Following recent amendments to the ICAP statute, the New York City Department of Finance has released proposed rules to implement and clarify the changes.
Key highlights of the amendments and proposed rules include:
- Governor’s Island Designated as a 25-Year ICAP Special Commercial Abatement Area
Effective January 1, 2026, Governor’s Island will be designated as a Special Commercial Abatement Area, making eligible commercial projects located there entitled to a 25-year ICAP benefit. - New Restrictions on Parking Facility Eligibility
ICAP benefits will no longer be available for parking facilities that require a license from the NYC Department of Consumer and Worker Protection for garage or lot operations. An exception applies where the parking facility is located on a separate tax lot but is part of residential construction receiving financial assistance from a local housing agency. - Expanded Prohibition on Storage Uses
Building on the existing exclusion of self-storage facilities, the statute now also excludes storage warehouses from ICAP eligibility. However, warehouses used by merchants to store goods for resale or business use—where the warehouse is licensed for such operations—remain eligible.
Belkin Burden Goldman, LLP is actively reviewing the proposed rules and preparing to submit comments and requests for clarification as part of the public rulemaking process. We continue to monitor these developments and are available to assist clients in evaluating the implications for their current or planned projects.
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Please don’t hesitate to contact us here with any questions or to discuss how these updates may impact your property or development plans.
Written by: Frank Baquero and Jason C. Hershkowitz, Tax Exemptions and Zoning Incentives Practice.
