There are numerous tax exemption and tax abatement programs available to property owners who construct new buildings or make alterations to existing buildings within the City of New York.
ICAP and ICIP
For owners of nonresidential buildings, the Industrial Commercial Abatement Program (ICAP) is available . Provided there is an increase in the real estate taxes of at least 15%, ICAP may provide a substantial tax savings where a building is altered or constructed in the City of New York. There are strict timing requirements and a preliminary application for ICAP benefits must be filed with the New York City Department of Finance prior to commencement of construction and prior to obtaining a construction permit from the New York City Department of Buildings. A final application for ICAP benefits must be filed within one year from the date a permit is issued.
421-a Tax Abatement
New residential construction of multiple dwellings may be eligible for a tax exemption under the 421-a program. An exemption covering the increase in real estate taxes may be obtained for a period of ten to twenty five years (depending upon the location and the type of 421-a benefit). In certain circumstances, up to three additional years of tax benefits may be obtained. Some geographical areas of the city require obtaining negotiable certificates or constructing 80-20 affordable housing projects, while other areas do not have such restrictions. 421-a is currently in effect for construction commenced in accordance with the 421-a law on or before December 31, 2015. The law firm of Tuchman, Korngold, Weiss, Liebman and Gelles, LLP, has many years of experience handling these applications.
J-51 Tax Abatement and Exemption
J-51 tax abatement and exemption benefits are available for major capital improvements performed at (1) eligible cooperatives and condominiums, (2) rental buildings subject to rent stabilization (3) certain Mitchell-Lama projects and (4) conversions from nonresidential to residential occupancy where there is substantial government assistance. The abatement can range between 6 to 20 years and the exemption period is either 14 or 34 years. The amount of the abatement is based upon a schedule of allowances promulgated by the Department of Housing Preservation and Development. The exemption is based upon the increase in assessed value attributable to the improvement.