ICAP Application and Tax Abatement Services in NYC

The Industrial and Commercial Abatement Program (ICAP) abates New York City property taxes for up to 25 years on eligible industrial and commercial buildings that are built, modernized, expanded, or otherwise physically improved. Filing timing is critical: when a building permit is required, the statute requires the preliminary application on or before the first permit issuance date. The separate no-permit procedure is described below. Ongoing renewal requirements continue for the life of the benefit. MGNY Consulting provides ICAP eligibility review, application and completion filings, and renewal support.

Our NYC ICAP eligibility check is a starting point for discussing a project. Confirm the property facts and current program requirements before relying on an estimate.

The same checker, with four short guides to the program, is at icapnyctax.com.

What is ICAP?

ICAP is the Department of Finance abatement that replaced the Industrial and Commercial Incentive Program (ICIP) in 2008. ICIP granted exemptions; ICAP instead abates a portion of the property tax attributable to eligible construction work, on a schedule that can last up to 25 years depending on project type and location. Some schedules last 8, 10 or 12 years; the applicable term needs to be checked for the project. Existing ICIP benefits continue under their own rules and their own annual renewal obligation. The ordinary abatement base is the amount by which the statutory post-completion building tax exceeds 115% of the initial building tax. These are defined calculations using the initial tax rate, not simply two tax bills; the statute also has special additional industrial benefits. Land tax is ordinarily outside the abatement.

Which projects are eligible?

Start with location, expenditure and completion timing, then check the use restrictions and filing requirements.

• Location. New commercial construction qualifies anywhere in the city except Manhattan south of 96th Street (and north of Murray, Frankfort and Dover Streets). Commercial renovation projects qualify anywhere except Manhattan between 59th and 96th Streets. Additional benefits apply in designated areas, including the Garment District and parts of Lower Manhattan.
• Minimum required expenditure. The project must meet the 30 percent minimum expenditure test within four years of the first building permit date, or the start of construction where no permit is required. The assessed-value baseline comes from the applicable roll immediately preceding that permit or commencement. Industrial projects that spend 40 percent can qualify for additional benefits.
• Timely completion. The project must be completed within five years of the first permit to receive ICAP inflation protection benefits.

For a detailed walk-through of eligible property types, see our guide: Which properties are eligible to receive ICAP tax benefits?

Limitations to check before you build

Retail space can change the applicable abatement schedule. Residential use requires a precise calculation: RPTL Section 489-cccccc(3)(a) excludes a property when 20 percent or more of its total rentable square footage is or will be residential. The statute separately treats residential use below 5 percent as negligible for this test and sets aggregation rules for applications covering multiple condominium properties. Do not assume that exactly 20 percent qualifies.

For mixed-use projects below that threshold, eligibility and the allocation of benefits still need review. A primarily residential project may warrant a separate 485-x eligibility review. Utility property is generally excluded, with an exception for electricity-generating peaking units.

The application sequence and its deadlines

The order of operations is fixed by DOF:

• Preliminary application. Arrange the filing before the first building permit. State law requires filing on or before the permit issuance date; filing after that date does not preserve eligibility. Where no permit is required, the statute provides a notarized architect or engineer notice within 30 calendar days after construction starts, containing the required application information. Preliminary applications are accepted until March 1, 2029, and the statutory permit cutoff is April 1, 2029.
• Final application. Confirm the deadline for the project with DOF. State law states a one-year filing period from the first permit, or commencement where no permit is required, and addresses late filings and a limited exception. DOF’s current instructions distinguish preliminary applications filed before and after March 10, 2017; for the latter, they direct filing after the preliminary-application steps are complete. Resolve which instructions apply before setting the filing calendar.
• Notice of completion when construction finishes.

Use restrictions also matter: self-storage facilities, consumer storage warehouses and licensed parking facilities are generally excluded. The statute contains a limited parking exception tied to housing-agency-assisted residential construction on a separate tax lot. Governors Island is designated a special commercial abatement area from January 1, 2026. Check the statutory eligibility rules and area designations for the proposed use.

For preliminary applications filed on or after April 1, 2017, DOF lists fees of $150 for the preliminary application, $500 for the final application and $1,000 for the notice of completion.

Larger projects carry an additional obligation: where project cost reaches a certain threshold, ICAP brings requirements to promote contracting opportunities among minority- and women-owned business enterprises (M/WBE). If a project also contains areas that are not eligible for ICAP, the availability of other exemption and abatement programs should be considered alongside it.

Keeping the abatement: the Certificate of Continuing Use (CCU)

An ICAP benefit requires a Certificate of Continuing Use (CCU) every two years for the life of the abatement. SmartFile is the online filing route; DOF also explains how to request a paper form. Check the instructions for the applicable renewal cycle. An unfiled renewal jeopardizes future benefits, and DOF can suspend the abatement pending the filing. MGNY maintains the renewal calendar after the initial application.

The 2027/28 season is open, and the certificates are due January 5, 2027. Our guides cover the January 5, 2027 deadline, the records to have ready, what follows a missed certificate and why ICAP renews every other year while ICIP renews every year.

How does MGNY handle ICAP?

MGNY reviews eligibility, prepares the preliminary and final applications and notice of completion, and maintains the renewal calendar afterward. The review should begin while the proposed use, design and permit timing can still be checked together.

Project information to have ready

• The property address and borough-block-lot.
• The proposed construction or renovation scope, use and rentable-area breakdown.
• The anticipated permit and construction dates, including any permits already issued.
• The taxable assessed value and the construction budget relevant to the minimum expenditure test.
• Existing tax benefits and any ICAP applications or notices already on file.

Where underwriting requires it, our tax opinions and projections work can evaluate the property’s tax position. Existing 421-a benefits or other incentives need to be identified before deciding which application route is available.

Discuss an ICAP application with MGNY or call (212) 343-1111 with the address, project scope and permit status.

Frequently asked questions about ICAP

What is the ICAP tax abatement in NYC?

ICAP is a Department of Finance program that abates property tax on eligible industrial and commercial construction, renovation and expansion projects for up to 25 years. It replaced ICIP in 2008.

How long does an ICAP abatement last?

Up to 25 years, depending on project type and location. Some schedules last 8, 10 or 12 years. The applicable schedule must be checked for the proposed work and tax lot.

When must the ICAP preliminary application be filed?

Arrange the filing before the first building permit. State law requires it on or before the permit issuance date. If no permit is required, the statute provides for a notarized architect or engineer notice within 30 calendar days after construction begins, with the information required for the preliminary application.

Is ICAP still available for new projects?

Yes, subject to the eligibility and filing rules. Preliminary applications are accepted until March 1, 2029, with a statutory permit cutoff of April 1, 2029. The proposed use, location, expenditure and any existing tax benefits must also be checked.

What is the ICAP certificate of continuing use (CCU)?

The biennial renewal filing that keeps an ICAP abatement in force. It can be filed through DOF’s SmartFile portal every two years for the life of the benefit; DOF also provides a paper-form request route. Failure to file jeopardizes the abatement for succeeding tax years, and DOF can suspend the benefit pending the filing.

Is there a free ICAP eligibility checker?

Yes. MGNY’s ICAP Eligibility Checker at icapnyctax.com is free and needs no sign-up: enter a New York City address, answer three questions about the project, and in under two minutes it reads the city’s assessment roll and says whether the project appears eligible. It is a screen, not a determination; the Department of Finance decides eligibility on the application.

The difference between an abatement and an exemption, and where ICAP sits among the city’s programs, is covered in NYC tax abatements explained.

For the eligibility tests, the filing deadlines and the benefit schedule that runs up to 25 years, in plain terms, read our guide, What Is ICAP?

Official references: DOF ICAP guidance, RPTL Section 489-bbbbbb benefit schedules and Section 489-cccccc eligibility and filing requirements.

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