Harlem Rep. Charles Rangel took a “homestead” tax break on a Washington, DC, house for years while simultaneously occupying multiple rent-stabilized apartments in New York City, possibly violating laws and regulations in both cases.
The situation raises a number of potential problems for the congressman, including:
* New York City law requires that tenants use rent-stabilized apartments as their primary residence.
* DC’s real Property Homestead Deduction Act also requires that a property receiving the benefit be a primary residence.
* Tax lawyers told The Post that a property owner cannot have two primary residences – or take advantages provided to primary residences at two different addresses simultaneously.
* DC’s law also requires that the owner of a property benefiting from the tax break be a personal-income taxpayer in DC. District law exempts members of Congress from paying personal DC income tax, but they must pay property tax.
The DC rules state that “by maintaining a residence in his home state and actively voting there, [a member of Congress] is demonstrating that he continues to be a part of the body politic of his home state . . . The Member is a domiciliary of his home state. Because he is not domiciled in the District, the Member cannot claim the District’s homestead deduction.”
Said Natasha Altamirano, a spokeswoman for the National Taxpayers Union, “If a member of Congress maintains his or her principal residence in the state they represent, they would not qualify for the homestead exemption.”
Meanwhile, the New York City Rent Stabilization Code states that its rules do not apply to “housing accommodations which are not occupied by the tenant . . . as his or her primary residence.”
Dov Treiman, a Manhattan real-estate attorney, said, “If the [rent-stabilized] apartment in New York is not your primary residence, the landlord has the right to bring a court proceeding to have you evicted.”
Patricia Wagner, special-programs manager in the Assessment Services Division of the DC Office of Tax and Revenue, confirmed to The Post that Rangel received a homestead tax deduction for his quarter-acre, four-bedroom property on Colorado Avenue.
The agency would not allow The Post to view original tax documents, such as Rangel’s applications, despite repeated requests.
However, Wagner provided spreadsheets showing Rangel’s reduced tax bills for the years 1995 through 2000, along with this written statement: “According to records . . . the subject account received the homestead benefit for the tax years provided in the report.”
Wagner could only confirm the tax deduction was granted from 1995 to 2000, she said, because the full 29-year tax history for the Rangel property was not available. The lawmaker sold the home in October 2000 for $500,000.
Between 1995 and 2000, he received a $30,000 exemption on the value of the house, resulting in a $288-per-year break on his property-tax bill and total savings of $1,728, the records show.
Rangel’s office would not say whether he received the homestead exemption.
“We have asked Mr. Rangel’s accountant to retrieve these old records to determine if that is true,” said Emile Milne, a spokesman for the congressman.
Under DC law, if Rangel was found to have misused the homestead deduction, he could be liable for back taxes, interest and penalties.
The possible double-dipping is only the latest in a mounting number of questionable financial reporting and accounting practices surrounding the 78-year-old chairman of the House Ways and Means Committee, which writes the nation’s tax code.
Rangel and his wife, Alma, purchased the DC house in 1971 for $43,000. In 1988, he began renting three rent-stabilized apartments in the Lenox Terrace building on 135th Street in Harlem, which he combined into one 2,500-square-foot home. Later, Rangel rented a fourth unit – a studio apartment that he used as an office.
He was forced to relinquish the office last month as the House of Representatives’ Committee on Standards and Official Conduct voted to conduct a probe of his personal finances.
The investigation, which Rangel requested, was announced shortly after The Post revealed that he had failed to report income on the rental of a beachfront villa he owns in the Dominican Republic. He later admitted that he failed to report $75,000 in income from the villa over a 20-year period and owed $9,500 in taxes.
At first, Rangel blamed the accounting mishaps on sloppy bookkeeping and his wife, who he said was in charge of the family’s finances. He also said he did not receive regular financial reports from the Punta Cana Resort and did not understand the paperwork because it was in Spanish.
Amid calls for him to give up his position as chairman of the Ways and Means Committee, Rangel promised in September to hire a forensic accountant to scour his tax returns and financial disclosures and to present the results to the Ethics Committee. After The Post reported on Nov. 2 that he had not yet hired a CPA, a spokesman for Rangel announced that he finally did so on Nov. 9.
In addition to the rental income from the villa and his use of the four rent-stabilized Harlem apartments, the committee is investigating Rangel’s use of congressional stationery to solicit funds for a City University of New York academic center named after him, and his use of a free parking spot in an underground House of Representatives parking lot to store his vintage Mercedes-Benz for an undisclosed number of years.