Shaw Towers Realty hits snag in bid to lower proposed tax valuation for Shaw Tower

[SINGAPORE] The High Court has thrown out a bid by Shaw Towers Realty to turn in a lower proposed annual value for its Shaw Tower building on Beach Road, in its upcoming appeal against the taxman.

The annual value is used by the authorities to calculate property tax payable.

The company received a valuation notice from the chief assessor of the Inland Revenue Authority of Singapore that proposed these annual values for two periods: about S$42.3 million from Jan 1, 2021, and around S$44.7 million effective from Jan 13, 2021.

The notice also said a property tax of 10 per cent would be imposed based on the S$42.3 million annual value from Aug 1, 2020, to Jan 12, 2021. The same rate would be levied on the annual value of S$44.7 million from Jan 13 to Dec 31, 2021.

Shaw Towers Realty made a counterproposal with annual values of about S$35.6 million and S$37.6 million for the two periods.

The chief assessor rejected the objection, prompting the company to appeal the decision to the Valuation Review Board, a tribunal that hears formal disputes and appeals regarding property tax.  

In its notice of appeal against the chief assessor’s valuation, Shaw Towers Realty provided a fresh set of proposed annual values: S$40 million and S$42.3 million.

But it later reverted the proposed figures to the earlier set of S$35.6 million and S$37.6 million, as stated in its notice of objection.

The Valuation Review Board dismissed the company’s application for permission to amend its notice of appeal, as the information was already within the property owner’s knowledge before filing the higher annual values.

The tribunal highlighted the importance of finality in litigation, and said that Shaw Towers Realty should not be allowed to “cherry-pick and vacillate in the grounds of appeal it intends to rely upon, while protracting the appeal process indefinitely”.

It added that this was “tantamount to a back-door attempt to revert to the original proposed” annual values.

Decision not appealable, says judge

Shaw Towers Realty intended to challenge the Valuation Review Board’s decision, but missed the deadline to file an appeal. It then turned to the High Court for permission to do so out of time.

In her grounds of decision published on Jun 17, Justice Mavis Chionh explained that the Valuation Review Board’s decisions on non-substantive matters are not amenable to appeal.

The judge ruled that the tribunal’s decision not to grant Shaw Towers Realty permission to amend its proposed annual values fell under this – made on a non-substantive property tax appeal – and therefore was not appealable.

She added that even if it were appealable, she would have rejected the application for an extension of time to file the appeal because the reasons provided by Shaw Towers Realty were “plainly inadequate and unacceptable”.

Although Shaw Towers Realty was denied the opportunity to amend its notice of appeal at the pre-hearing stage, the judge said it could still be allowed to adduce further evidence at the substantial hearing if the Valuation Review Board deemed it appropriate.

The property in question has been torn down and redeveloped into a 32-storey building, which is expected to obtain its temporary occupation permit this year.

The new Shaw Tower has about 435,000 square feet of Grade A office space, and around 15,700 sq ft of retail and F&B offerings, including a rooftop restaurant. It also houses roughly 21,500 sq ft of community-centric facilities.