After a New York judge determined on Tuesday that Donald Trump and his company had been utilizing deceptive methods to appraise his properties, Trump focused on the section of the ruling concerning his residence, Mar-a-Lago.
“This highly biased ‘Judge’ (All the Clubs, etc.) just stated that Mar-a-Lago was VALUED at only 18 million dollars, when in reality, it could be worth 100 times that amount,” Trump exclaimed. In reality, the judge had referenced valuations from the Palm Beach County Property Appraiser, which placed the value of the property between $18 million and $28 million, depending on the year, from 2011 to 2021.
Although Trump may believe that Mar-a-Lago is worth $1.8 billion, his own company acknowledged in 2020 that the Palm Beach appraiser’s valuation was accurate. That year, the county appraised Mar-a-Lago at $27 million.
“The Petitioner agrees with the determination of the property appraiser or tax collector,” stated a real estate broker representing Mar-a-Lago on a filed form obtained by CBS News.
The broker, Michael Corbiciero, initially challenged the valuation but later withdrew the petition and acknowledged the accurate appraisal of the property.
Corbiciero could not be reached for comment. Mar-a-Lago and other Trump properties are currently involved in a $250 million civil lawsuit filed by New York Attorney General Letitia James. The judge overseeing the case ruled on Tuesday that Trump and his company are liable for fraud, as they overestimated the properties’ values by hundreds of millions of dollars and misrepresented Trump’s overall worth by billions while seeking bank loans. The upcoming trial will now address other allegations in the lawsuit related to falsification of business records, issuance of false financial statements, insurance fraud, and conspiracy.
Corbiciero’s initial petition challenging the valuation does not specify whether he believed the club was undervalued or overvalued. However, most contested valuations are filed by property owners claiming that the county has overvalued their properties, according to Becky Haltermon Robinson, a spokesperson for the Palm Beach Appraiser.
This is because higher property values result in higher local property taxes. Mar-a-Lago’s valuation reflects that it is deemed a private club, even though Trump uses it as a residence.
“Mar-a-Lago is restricted by a deed as a private club. The deed explicitly prohibits any other use, and as a result, our office appraises it similarly to other private clubs in Palm Beach County,” explained Haltermon Robinson.
Deed restrictions can negatively impact a property’s value, as noted by Eli Baracha, director of Florida International University’s Hollo School of Real Estate.
“When there are restrictions on a property, its value tends to decrease rather than increase,” Baracha stated. “Whenever you limit the possible uses of a property, the chances of its value decreasing are higher.”
The county appraiser employs the income approach to assess properties like Mar-a-Lago, which takes into consideration the club’s finances.
“For the income approach, we typically request financial statements from businesses and analyze their income and expenses to calculate the value,” Haltermon Robinson explained.
In the year that Mar-a-Lago agreed with the appraiser’s $27 million valuation, Trump and his company reported a value of $490 million for the property in financial documents submitted to banks, according to the New York Attorney General.
It is not uncommon to inform banks that a property is worth more than its government-appraised value. However, such a substantial difference is rare, as Baracha pointed out.
“Typically, when two well-informed parties assess a property, the valuation would only differ by about 10% to 20%,” Baracha stated. “Differences of thousands of percentages are unusual.”
Nevertheless, Baracha stated, “When teaching real estate, we never rely on county appraisals as a reliable indicator of a property’s worth. We always conduct a market analysis.”
According to Baracha, there are a couple of factors that appraisers overlook, leading to an undervaluation of properties like Mar-a-Lago, which Trump purchased in 1985.
“The more unique a property is and the longer it has been owned by the current owner, the greater the likelihood of a significant gap between its actual value and the value determined by the county,” Baracha explained.
While Trump claims that the valuation gap is extraordinary, the New York attorney general and the judge disagree.
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