Local farm and eatery Bollywood Veggies has lost its court fight with the taxman over property tax to be paid on the Lim Chu Kang property.
Bollywood Veggies had challenged the method used to determine the annual value of the 10 acre, or roughly 4ha, property, which was increased from $87,000 to $107,100 in December 2018.
It had argued that the value of buildings should not be included in the computation.
Non-residential properties are taxed at 10 per cent of their annual value. This means the amended annual value led to an increase of $2,010 in property tax.
Yesterday, in a written judgment, High Court judge Aedit Abdullah dismissed the farm's appeal, saying that it was without merit.
Bollywood Veggies was founded in 2001 by Mrs Ivy Singh-Lim, the outspoken former president of Netball Singapore, and her husband, Mr Lim Ho Seng, former chief executive of NTUC FairPrice.
The land on which it sits - which is leased from the Singapore Land Authority - comprises a vegetable farm and various buildings, including a bistro, an event space, an office and workers' quarters.
The annual value of buildings is defined by the Inland Revenue Authority of Singapore (Iras) as the estimated gross annual rent of the property if it were to be rented out.
For agricultural properties that are rarely rented out, Iras typically determines annual value at 5 per cent of the property's estimated value, the court heard.
In the case of Bollywood Veggies, the annual value of $107,100 was a summation of the annual value of the land and the estimated value of the buildings, rounded up from $107,050.
Iras took the annual rent payable by Bollywood Veggies as representative of the annual value of the land. The increase in annual value resulted from an increase in rent from $57,300 to $77,400 for 2018.
For the buildings, Iras adopted the figure of 5 per cent of the total building costs of $593,000, or $29,650. This figure has been used since 2015.
Bollywood Veggies appealed to the Valuation Review Board against the amended annual value, but lost its case.
It then appealed to the High Court.
The farm argued that the value of the buildings should not be included in computing annual value as it is not allowed to sublet them without approval.
Even if the value of the buildings were to be included, the figure of $593,000 was unreliable, the farm argued.
The figure had been provided to Iras in an e-mail in 2010 by the architect for some alteration works. The architect later retracted it.
In his judgment, Justice Aedit said a prohibition against renting out a property - as in the current case - does not prevent a hypothetical rental value from being ascribed to it.
Citing a past court decision, he said: "Valuation under a hypothetical tenancy has been possible even where it is clear that there could be no hypothetical tenant other than the actual occupier."
The judge said the decision to use the building costs as an indication of the value of the buildings was reasonable.
He added that, in the absence of any explanation for the retraction, Iras was entitled to rely on the information in the architect's e-mail in determining these costs.
He noted that Bollywood Veggies did not contest the accuracy of the figure of $593,000, and had been asked by Iras in 2014 and 2015 to clarify the building costs but did not do so.
"This suggests that the figure of $593,000 was indeed correct," said the judge.
