TAX BILL 2025

🏠 Key changes that will affect property & home-owners

New “Mansion Tax” for high-value homes

The government is introducing a new annual surcharge on homes valued at £2 million or more (as measured in 2026 valuations), starting in April 2028.
The surcharge will be: £2,500/yr for properties £2 m–£2.5 m, rising up to £7,500/yr for properties valued over £5 m.
While many properties in Havering are likely well below that threshold, this will affect owners of high-end properties (especially luxury homes).

Impact: If you own a high-value home locally (or plan to buy one), you should factor in a substantial ongoing tax bill — not just upfront taxes or mortgage costs.

Higher tax on property income (affecting landlords / buy-to-let owners)

From April 2027, the tax rates on income from rental property will rise: basic rate becomes 22%, higher rate 42%, additional rate 47%.
This means landlords’ net returns (after tax) could shrink — which may lead to rent increases, fewer landlords, or landlords reassessing whether to hold property.

Impact: For those renting out properties in Havering, this could raise the cost of letting and potentially reduce rental supply — affecting renters and landlords alike.

Local council tax increase in Havering for many homeowners (already underway)

The local council (Havering Council) has recently approved a 4.99% increase in council tax for 2025/26, as part of its budget to plug a £70 m+ shortfall.
In addition, they’ve proposed increases in fees, charges, and rents for council tenants — reflecting rising costs across services.

Impact: Even if you don’t own a high-value home or rent out property, regular households in Havering will likely see higher yearly bills.

Potential pressure on property values (esp. high-end houses) and demand dynamics

Because the surcharge applies above a high-value threshold, it may cool demand for luxury homes (people may be reluctant to commit to extra annual payments).
For landlords with expensive properties, reduced net yields might make them sell — adding supply, which could depress prices for high-end homes or shift demand downward.

Impact: If there are many investors or homeowners with higher-end properties nearby, this may gradually shift the local property market — potentially making high-end homes less attractive, or lowering prices/rental yields in that segment.

Increased cost for renters may flow from landlords reacting to higher taxes

With rental-income tax rising, landlords may try to pass some of the extra cost onto tenants (higher rents), or decide to sell properties — reducing rental supply.
In areas like Havering, this could lead to rent increases or reduced availability of rental properties — particularly if landlords with older or marginally profitable properties exit the market.

Impact: Residents renting in Havering may see upward pressure on rents, or find less rental property available, which could make renting less affordable or more competitive.

⚠️ A few caveats and who will (likely) be less affected

If your home value is well below £2 million — which is likely for the majority of properties in Havering — the new “mansion tax” won’t apply.
The increased property-income tax from 2027 affects mainly landlords and those drawing income from property; homeowners of their own residence only are less impacted.
The local council tax increase affects all residents, but the impact is more modest compared to the surcharge on multi-million-pound homes.