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. Our firm advises Clients to insure that the optimization of the maximum tax benefits available. Below is a summarization of some of the benefits that are an essential element to profitable property development.
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. There are strict timing requirements and a preliminary application for ICAP benefits and it is imperative to Developers seeking to maximize filing for ICAP benefits to receive counsel and promptly file for the benefits.
421-a Tax Abatement
New residential construction of multiple dwellings may be eligible for a tax exemption under the 421-a program. Which is a Tax Abatement that limits or halts the increase of tax liability for a building for a period of ten to twenty five years (depending upon the location and the type of 421-a benefit). 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.
J-51 Tax Abatement and Exemption
J-51 tax abatement and exemption benefits are available for major capital improvements performed at eligible properties. 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 and is a valuable tool to developers significantly improving properties.