| | INDUSTRIAL & COMMERCIAL INCENTIVE PROGRAM (ICIP) |
| PROGRAM DESCRIPTION |  |
Note: The State Legislature has passed legislation (see below) that would create the Industrial and Commercial Abatement Program (ICAP), which would replace ICIP retroactively to July 1, 2008. The Governor has not yet signed the bill. Look for more details about the ICAP program on this page as they become available.
ICAP (A11586/S6366)
ICAP (A11755/S8705)
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| COMMERCIAL BUILDINGS | | |
| The Industrial and Commercial Incentive Program (ICIP) provides exemption from real estate taxes on increases in assessed value on eligible commercial buildings that are built, modernized, rehabilitated, expanded or otherwise physically improved. | |
| INDUSTRIAL BUILDINGS | | |
| The Industrial and Commercial Incentive Program (ICIP) provides exemption from real estate taxes on increases in assessed value and abatement on pre-existing real estate taxes for eligible industrial buildings that are built, modernized, rehabilitated, expanded or otherwise physically improved. | |
| ELIGIBILITY & TIPS | |
| COMMERCIAL BUILDINGS | | |
Eligibility
- Location, New Construction - The commercial new construction project must be located in (a) Manhattan north of 96th Street; (b) Manhattan south of Murray, Frankfort and Dover streets and meet ICIP “Smart Building” requirement; or (c) the outer boroughs.
- Location, Renovation– The commercial renovation project must be located in (a) Manhattan north of 96th Street; (b) Manhattan south of 59th Street; or (c) the outer boroughs.
- Expenditures - Leasehold expenditures must be at least (a) 10% of the pre-existing assessed value of the applicable building for projects in Manhattan north of 96th Street or in the outer boroughs; or (b) 20% of the pre-existing assessed value of the applicable building for projects in Manhattan south of 59th Street.
| Tips:
- Preliminary applications must be filed before (a) receipt of the first building permit; or (b) if no permit is required, before the start of construction.
- Benefits are not available for projects between 59th Street and 96th Street in Manhattan.
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| INDUSTRIAL BUILDINGS | | |
Eligibility
- Location - Industrial projects located anywhere in New York City are eligible.
- Expenditures - Leasehold expenditures must be at least (a) 10% of the pre-existing assessed value of the building for ICIP exemptions only; or (b) 25% of the pre-existing assessed value of the building for ICIP exemptions and abatements.
| Tips:
- Preliminary applications must be filed before (a) the receipt of the first building permit; or (b) if no permit is required, the start of construction.
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| PROGRAM BENEFITS | |
| COMMERCIAL BUILDINGS | | |
- Real estate tax exemption on the increase in assessed value that is solely attributable to improvements to a commercial building.
- For commercial new construction projects in “Smart Buildings” in Manhattan south of Murray and Frankfort Streets, a 4-year full exemption, with a 4-year phase-out thereafter.
- For commercial renovation projects in Manhattan south of 59th Street, an 8-year full exemption, with a 4-year phase out thereafter.
- For commercial projects in “regular exemption areas” in Manhattan north of 96th Street or in Brooklyn, Queens, the Bronx or Staten Island boroughs, an 11-year full exemption, with a 4-year phase-out thereafter.
- For commercial projects in “special exemption areas” in Manhattan north of 96th Street or in Brooklyn, Queens, the Bronx or Staten Island, a 16-year full exemption, with a 9-year phase-out thereafter and 13 years of inflation protection.
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| INDUSTRIAL BUILDINGS | | |
- A 16-year full real estate tax exemption on the first-year increase in assessed value that is solely attributable to improvements to an industrial building, with a 9-year phase-out thereafter. Additionally, the exemption amount will be increased in each of the first 13 years by the applicable inflation rate.
- A 4-year, 50% abatement of the pre-existing real estate taxes for the applicable industrial building, with an 8-year phase-out thereafter.
- The abatement is based on real estate taxes on both the land and improvements for the tax year preceding the issuance of the building permit.
- If no building permit is required, the abatement is based on real estate taxes in the tax year preceding the start of construction.
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| EXAMPLE BENEFITS CALCULATION | |
| COMMERCIAL BUILDINGS | | |
XYZ Corporation, a financial services firm that owns its own building in Downtown Brooklyn, makes renovations costing $300,000. Its property had a previous assessed value of $1,000,000, which the renovations increased by 14% or $135,000. The calculation assumes a real estate tax rate of 11.306%.
|
Year |
ICIP Percent |
ICIP Benefit |
|
1 |
100% |
$15,263 |
|
— |
— |
— |
|
11 |
100% |
$15,263 |
|
12 |
80% |
$12,210 |
|
13 |
60% |
$9,158 |
|
14 |
40% |
$6,105 |
|
15 |
20% |
$3,053 |
|
Total (Nominal) |
|
$198,420 |
|
NPV (6.25%) |
|
$132,759 |
As shown above, ICIP would result in aggregate savings of $198,420 in real estate taxes over 12 years. | |
| INDUSTRIAL BUILDINGS | | |
XYZ Corporation, a footwear manufacturer located in Downtown Brooklyn, makes renovations costing $300,000. Its property had a previous assessed value of 1,000,000, which the renovations increased by 14% or $135,000. The calculation assumes a tax rate of 11.306% and inflation of 3.5% annually.
| Exemption Year |
Exemption Percent |
ICIP Exemption Benefit,
with Inflation |
Abatement Percent |
ICIP Abatement Benefit |
| 1 |
100% |
$15,263 |
50% |
$56,530 |
| 2 |
100% |
$15,797 |
50% |
$56,530 |
| 3 |
100% |
$16,350 |
50% |
$56,530 |
| 4 |
100% |
$16,922 |
50% |
$56,530 |
| 5 |
100% |
$17,515 |
40% |
$45,224 |
| 6 |
100% |
$18,128 |
40% |
$45,224 |
| 7 |
100% |
$18,762 |
30% |
$33,918 |
| 8 |
100% |
$19,419 |
30% |
$33,918 |
| 9 |
100% |
$20,099 |
20% |
$22,612 |
| 10 |
100% |
$20,802 |
20% |
$22,612 |
| 11 |
100% |
$21,530 |
10% |
$11,306 |
| 12 |
100% |
$22,284 |
10% |
$11,306 |
| 13 |
100% |
$23,064 |
|
|
| 14 |
100% |
$23,064 |
|
|
| 15 |
100% |
$23,064 |
|
|
| 16 |
100% |
$23,064 |
|
|
| 17 |
90% |
$20,757 |
|
|
| 18 |
80% |
$18,451 |
|
|
| 19 |
70% |
$16,145 |
|
|
| 20 |
60% |
$13,838 |
|
|
| 21 |
50% |
$11,532 |
|
|
| 22 |
40% |
$9,225 |
|
|
| 23 |
30% |
$6,919 |
|
|
| 24 |
20% |
4,613 |
|
|
| 25 |
10% |
$2,306 |
|
|
| Total |
|
$418,912 |
|
$452,240 |
| NPV (6.25%) |
|
$220,011 |
|
$339,371 |
As shown above, ICIP would result in aggregate savings of $418,912 in real estate tax exemptions over 25 years and $452,240 in real estate tax abatements over 12 years.
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| CONTACT INFORMATION | |
Get more information about ICIP in the New York City Department of Finance section of the City’s Website.
ICIP Unit
66 John Street
13th Floor
New York, NY 10038
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| | | | RELATED LINKS | New York City Map
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