Luxury home owners must brace themselves for tighter leasing market

Especially with a slew of 86,000 units.

According to Knight Frank, with the removal of property tax refund concession, property investors will inadvertently face higher risk from higher taxes.

Some may lower rents to quickly secure a tenant to counter higher taxes with the inability to claim vacancy tax refund.

Coupled with the large impending supply of residential properties of about 86,000 units to be completed by 2017, the leasing market would be more competitive especially for owners of luxury residential properties.

Here's more from Knight Frank:

In addition, the increases in tax payable would lead to further yield compression, as owners have to fork out additional costs for property tax on top of the other holding costs, such as management fees, income tax and mortgage interest.

The attractiveness of holding a residential investment property for rental income objective would be affected with this new property tax regime.