The Real Deal New York

Trump is claiming a $45K tax break for a penthouse he won’t be living in

Paul Manafort, meanwhile, appears to have broken the law by seeking the abatement at Trump Tower despite living in Florida
By Chava Gourarie | September 15, 2017 02:05PM

President Donald Trump and his Fifth Avenue penthouse

President Trump may not be living in his triplex penthouse at Trump Tower, but he’ll be saving nearly $45,000 by declaring it as his primary residence on his 2017 property taxes, which were filed after the election.

​”Feels good to be home after seven months,” Trump tweeted after arriving at Trump Tower in August​ for the first time since the inauguration​,​ “but the White House is very special.”​

The president is famously fond of his own turf, and has spent 75 days at Trump properties since taking office. But in all likelihood, this is the last time in the next few years that the president will be able to call Trump Tower home for tax purposes, which he’s done since moving into the penthouse in 1995.

The credit, called the “coop condo abatement,” is available to owner-occupied co-ops and condos and shaves up to 28.1 percent of property taxes for the unit. It was implemented to compensate for the fact that condos and co-ops are treated as commercial properties and taxed at higher rates than other types of housing units. It was initially available to all condo and co-op owners, but since 2012, owners can only claim the abatement if the units are their primary residence and the deed is in their name.

Owners had to file for the abatement between December and March, and eligibility is based on the owner’s status as of Jan. 5 of that tax year. Because Trump Tower was Trump’s primary residence on January 5, 2017, the practice appears to be perfectly legal.

This tax year, the savings represent 17.5 percent of Trump’s $255,000 tax bill for the golden unit, according to an analysis of documents from the city’s Department of Finance by The Real Deal.

Over the last five years, Trump has saved just under $200,000 on his tax bills thanks to this abatement, Department of Finance documents show.

Though Trump appeared to follow all the legal requirements to collect the abatement, his former presidential campaign adviser did not. On his 2016 property taxes, Paul Manafort claimed the tax abatement for his condo on the 43rd floor, which yielded a savings of about 17.5 percent on his overall bill. But Manafort also declared that his home in Palm Beach, Florida was his primary residence, and was granted an abatement there, which was first revealed by the New York Daily News in April.

This year, Manafort again sought property tax abatements for both his Trump Tower and Palm Beach residences. The Department of Finance initially granted Manafort a 17.5 percent discount of $6,065 on his Trump Tower apartment this year, but later reversed its decision.

According to rules in both New York and Florida, it’s illegal to claim primary residency in more than one state. Manafort’s attorney did not return a request for comment.

Trump and his former adviser are among the 56 homeowners at Trump Tower — out of 231 — who claimed the condo-co-op abatement for 2017, an analysis of Department of Finance records shows.

But it’s unlikely that Trump can claim the penthouse as his primary residence next year while living in the White House, according to multiple real estate tax lawyers and building managers who spoke to TRD. Primary residence can be established in various ways, but Trump likely won’t meet the most critical one: actually living in the home.

Trump almost certainly won’t be spending the requisite amount of days in New York to claim residency. And even if his wife Melania did, it’s unlikely that would help Trump’s claim because she is not on the deed, said Tom Schmitt, the CFO of Charles H. Greenthal Management Corporation, a property management firm.

Another factor is where the owner files his or her taxes, and it’s not clear where the mercurial Trump would file in 2018.

In 2010, then-President Obama listed 1600 Pennsylvania Avenue as his address on his federal tax filings, but continued to pay state taxes in Illinois, where he owned a home, filings show.

If his primary residence in the next tax year is the White House, Trump will have to inform the managing agent of the condo building of the change. It’s up to the managing agent of each co-op and condo building to collect the eligibility information from individual owners and update the Department of Finance, which will review individual cases on its own schedule.

As a relatively new law, verifying who is and is not a primary resident is not an entirely efficient process, according to Jeffrey Golkin, a real estate tax attorney. If the information is not correct, it can take the Department of Finance months or longer to flag and correct that information, he said.

Representatives for the Department of Finance did not return requests for comment.

The White House did not respond to a request for comment, nor did the Trump Organization.