The Big Question
You’ve heard that property tax is based on how much rent you’d get if you rented the place out.So, if you’re living in a 4‑room HDB flat in Jurong West, your annual value (AV) is pegged at $10,140 – about $845 a month – and you’re on the hook for $149.60 in tax.But what about a farm that needs plant‑watering licences or a vintage bistro that no one can rent out?
How does the government pick an annual value (AV) for those quirky places?
Meet Bollywood Veggies (BV)
| Year | Action | Result |
|---|---|---|
| 2018 | Assessor couldn’t map a market rent → 5 % of BV’s building costs used instead | $29,650 for buildings |
| 2018 | CA raised the land rent from $57,300 to $77,400 based on an JLL report | $77,400 for land |
| 2018 | Both summed up | $107,100 total AV (rounded) |
BV fought back, filing a valuation notice with the Valuation Review Board (VRB) asking, “Why include the building costs at all?”
The VRB’s Verdict (and the High Court’s eventual nod)
| Factor | What the court said |
|---|---|
| Land rent hike | Justified because it came from a credible JLL report. |
| Building tax | Under Sections 2(1) & 6(1) of the Property Tax Act: Even “non‑rentable” building, like a farm structure, can & must be taxed. |
| 5 % rule | The CA correctly used §2(3)(a), so no error. |
| Timing issue | Why not add the building’s value in 2014? The law (s 20(1)) says the CA can update AV when accuracy is off. |
In short, the court gave a thumbs‑up to the CA’s assessment of $107,100 for 2018. BV didn’t win in court, but the case shines a light on how the system handles the oddball property.
Take‑Home Chat
Final Thought
Think of your property tax as a “fantasy rent” game. It’s not about what you actually earn, but what the market would say you could if the place were available. Makes the whole thing a weird little mix of law, numbers, and a dash of imagination.Happy tax‑calculating, folks!
The cost of buildings used for taxation assessment
Why BV’s Property Valuation Appeal Fell Flat
Picture this: BV thinks the tax office over‑charged him by basing the property’s value on a $593k building‑cost figure that was scoffed at almost immediately after it was handed over.
The Big Question: Is That $593k Even Legit?
According to BV, the $593k estimate came from an architect involved in an Alteration and Addition (A&A) project back in 2010. The twist? That very next day, the architect wrote to IRAS, begging them to treat the figure as if it never existed and to communicate straight with BV.
So first, why would IRAS even entertain a number that the architect herself signaled was “void”? That is the crux of BV’s grievance.
Time‑Bugs & Building‑Mix‑ups
- BV argues the 2010 cost is wildly disconnected from the 2018 property value. The gap feels more like a time‑warp than a natural progression.
- There’s also a missing link: The A&A work in 2009/2010 has no connection to the assessed 2018 value. That’s like comparing a vintage wine to a fresh splash of lemonade.
- To top it off, some buildings were raised way earlier (2001, 2004) and weren’t part of the AV assessment. That adds another feather to BV’s claim that the methodology is fundamentally flawed.
Who Said the Buildings Were Incomplete?
Enter the JLL report. It mentioned the buildings had “generally good condition,” but it didn’t actually value them. Instead, it blended their worth into the land’s annual rent valuation of $77,400—suggesting the buildings were either deemed negligible or just part of the whole package.
Defending the Sides: What the Chief Assessor’s Reply Looks Like
The Chief Assessor takes a few neat arguments:
- The supposedly void $593k figure was never raised as an issue with IRAS prior to the VRB proceedings. It was a hidden bomb, dropped mid‑air.
- BV didn’t present an alternative method to estimate the building value. The JLL report was the only source from which the Assessor could derive a cost.
- Despite attempts to dig deeper into building costs, BV stayed tight‑fisted and didn’t provide what was needed. So the $593k became the de facto baseline. “If you’re not going to share the data, it’ll be your data for all purposes.”
Final Verdict: The Appeal was Let Go
In October 2021, the court went in favor of the tax office and struck down BV’s appeal. They cited Section 2(1) of the Property Tax Act, which states that the “rent” is a notional or hypothetical figure—used to estimate how the property could reasonably be let over time.
In other words, even if a lease forbids subletting, you’re still bound to be assessed as if you were to let it out under a cameo-Tenant scenario.
Why This Matters for Anyone with a Rental Property
Takeaway: ownership isn’t a shield. Even if your lease stifles subletting, that does not exempt you from valuation. The tax office will still create a hypothetical tenant (which you could think of as a “super‑ordinary” tenant) and estimate the value accordingly.
In the classic words of Benjamin Franklin—“Nothing is certain but death and taxes”—the former is still a solid fact.
With these insights, any property owner should be prepared that what appears in the lease isn’t the final word on taxation.
— Published originally on 99.co
