In his commentary, “Court ruling creates uncertainty for developers” (May 10), Mr Colin Tan seemed to suggest that the Glengary case was the first time the Inland Revenue Authority of Singapore had taken action to reassess the annual value of land under development.
This is not the case. The annual value (AV) of any property, including vacant land under development, is reviewed regularly to reflect prevailing market values in any year. Hence, the AVs may go up or down accordingly.
Real estate developers would be fully aware that the AVs of their lands are assessed on a “vacant land” basis during the development period.
This is provided for in the Property Tax Act, and it has been our long-standing position to disregard pre-sales when determining the AV of such vacant land.
For this case, the developer disagreed with our position and brought the matter to court.
The Court of Appeal has affirmed our position. Hence, the decision would not have introduced more uncertainty into the business of property development nor affected developers’ land bids, as the writer alluded.
WALTER LIM, DIRECTOR (CORPORATE COMMUNICATIONS), INLAND REVENUE AUTHORITY OF SINGAPORE
Source : Today – 15 May 2013