Singapore’s High Court has ruled in favour of a developer, slashing the taxman’s S$51.4 million annual land value assessment for a condo site at Marina Boulevard in 2007 and 2008 to S$27 million.
The ruling translates to tax savings of over S$2 million for Glengary, the developer of luxury condo The Sail@Marina Bay (pictured).
This sets a precedence that the sale of units before the start of construction must be taken into account when assessing land value for tax purposes. Prior to the ruling, the Chief Assessor had ignored such sales and appraised the land as if it was vacant.
From April 2007 to January 2008, the Chief Assessor had appraised the land as being worth S$51.4 million. This practice was based on a section of the Property Tax Act, which allowed the tax department to calculate the value of the land as if it was vacant.
However, Glengary argued that even though the land was still vacant during that period, it had already sold most of the units and these should be taken into account as encumbrances – restrictions and obligations on how the land can be utilised, which reduces the land value.
Justice Lai Siu Chiu ruled that the taxman’s administrative practice is not the law. The judge explained that “the plain wording of s 2(3)(b) of the Act does not necessarily require that committed sales be excluded from consideration in the assessment of annual value, given that committed sales may occur even in relation to vacant land”.
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