BFC Development LLP v Comptroller of Property Tax: Property Tax Refund Dispute
BFC Development LLP sought a mandatory order for the Comptroller of Property Tax to refund property tax for units at Marina Bay Financial Centre Towers 1 and 2 during rent-free fitting-out periods. The High Court of Singapore, on 28 November 2012, dismissed the application, holding that the units were not 'unoccupied' under Section 8 of the Property Tax Act, as tenants had already taken possession and were conducting fitting-out works. The court reasoned that the tax refund was intended for property owners genuinely unable to secure tenants, not for periods where rent was willingly forgone as part of a lease agreement.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Application dismissed with costs to be paid by the Applicant to the Comptroller.
1.3 Case Type
Tax
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court held that BFC Development LLP was not entitled to property tax refunds for units undergoing fitting-out periods, as they were considered 'occupied'.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Comptroller of Property Tax | Respondent | Government Agency | Application Dismissed | Won | Lau Kai Lee of Inland Revenue Authority of Singapore Michelle Chee of Inland Revenue Authority of Singapore |
| BFC Development LLP | Applicant | Limited Liability Partnership | Application Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tay Yong Kwang | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Lau Kai Lee | Inland Revenue Authority of Singapore |
| Michelle Chee | Inland Revenue Authority of Singapore |
| Tan Kay Kheng | WongPartnership LLP |
| Novella Chan | WongPartnership LLP |
| Jeremiah Soh | WongPartnership LLP |
4. Facts
- BFC Development LLP owned units at Marina Bay Financial Centre Towers 1 and 2.
- Temporary Occupation Permits for Towers 1 and 2 were issued in March and August 2010, respectively.
- BFC Development LLP had secured tenants who signed Letters of Offer before the TOPs were issued.
- Tenants were granted rent-free fitting-out periods before the commencement of their leases.
- BFC Development LLP claimed property tax refunds for the fitting-out periods under Section 8 of the Property Tax Act.
- The Comptroller initially allowed the claims but later withdrew the refunds, stating the units were 'occupied'.
- The Offer Letters provided the tenants with a rent-free period for the units to be fitted out for occupation before the commencement of the lease on the term start date.
5. Formal Citations
- BFC Development LLP v Comptroller of Property Tax, Originating Summons No 635 of 2012, [2012] SGHC 237
6. Timeline
| Date | Event |
|---|---|
| Temporary Occupation Permit issued for Tower 1 | |
| Temporary Occupation Permit issued for Tower 2 | |
| Comptroller withdrew property tax refunds | |
| Comptroller explained reason for withdrawing refunds | |
| Applicant filed Originating Summons | |
| Leave granted to Applicant to apply for a mandatory order | |
| Hearing on the substance of the application | |
| Judgment reserved |
7. Legal Issues
- Interpretation of 'Unoccupied' under Section 8 of the Property Tax Act
- Outcome: The court held that 'unoccupied' should be interpreted in line with the legislative intent of providing relief to owners genuinely unable to secure tenants, and that units undergoing fitting-out were not 'unoccupied'.
- Category: Substantive
- Sub-Issues:
- Meaning of 'occupation' in the context of property tax refunds
- Whether fitting-out periods constitute 'occupation'
8. Remedies Sought
- Property Tax Refund
- Mandatory Order for Refund
- Declaration of Entitlement to Refund
9. Cause of Actions
- Application for Mandatory Order
- Application for Declaration
10. Practice Areas
- Tax Litigation
- Property Tax
11. Industries
- Real Estate
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Malaysia Investments Ltd v Chief Assessor | unknown | Yes | [1969] 1 MLJ xlix | Malaysia | Cited to establish that property tax in Singapore is levied on the ownership of property, independent of its occupation or beneficial use. |
| Graysim Holdings Ltd v P & O Property Holdings Ltd | unknown | Yes | [1996] 1 AC 329 | England | Cited for the principle that the meaning of 'occupation' varies according to the subject matter and context. |
| Lee Wah Bank Ltd v The Commissioner of Federal Capital of Kuala Lumpur | unknown | Yes | (1962) 28 MLJ 23 | Malaysia | Cited to support the argument that sufficient control over a property is required for it to be considered occupied. |
| Arbuckle Smith & Co Ltd v Greenock Corporation | Privy Council | Yes | [1960] AC 813 | England | Cited by the Applicant for the principle that occupation requires enjoyment of the property, but distinguished by the court due to the different context of rateable occupation in England. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap. 322, R 5, 2006 Rev Ed) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Property Tax Act (Cap 254, 2005 Rev Ed), s 8 | Singapore |
| Property Tax Act (Cap 254, 2005 Rev Ed), s 2(1) | Singapore |
| Building Control Act (Cap 29, 1999 Rev Ed), s 12(4) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Property Tax
- Refund
- Unoccupied
- Fitting-Out Period
- Temporary Occupation Permit
- Possession
- Occupation
- Rent-Free Period
- Annual Value
15.2 Keywords
- property tax
- refund
- unoccupied property
- fitting out period
- property tax act
- singapore
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Property Tax | 90 |
| Fitting-Out Period | 60 |
| Administrative Law | 40 |
| Property Law | 30 |
| Contract Law | 30 |
16. Subjects
- Property Law
- Taxation