Real estate investment in Iceland
Foreigners can buy, lease and sell properties without restrictions in Iceland. The sale of land to foreigners is prohibited. The land on which the house stands can be taken on a long-term lease.
Statistics confirm the liquidity of investments: every quarter, residential real estate prices grow by an average of 2.5%. Five years ago, an apartment of 100 m² cost an average of €267,000, and today it is sold for €440,000.
€4,405
Average price per 1 m²
of housing in Iceland
of housing in Iceland
2,5%
Average price per 1 m²
increase per quarter
increase per quarter
0,9—3,4%
Buyers’ related expenses,
of the transaction amount
of the transaction amount
How the residential property price index is growing in Iceland
Cost of a 3-bedroom apartment in Iceland
€1 million
Penthouse in Reykjavik
€500,000
Attic apartment with an ocean view in Reykjavik
€300,000
Apartment in Reykjavik
What do investors buy?
The most expensive real estate in Iceland is in the capital, Reykjavik.
Apartments
- penthouses
- attic apartments
- apartments
Houses
- townhouses
- villas
- farms
Iceland residence permit or citizenship by real estate investment
Obtaining an Iceland residence permit or citizenship is not connected with purchasing real estate.
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Taxes and associated costs
Taxes
Owners of real estate in Iceland pay an annual municipal tax of up to 1.65% of the cadastral value. The tax rate depends on the municipality.
If the owner leases the property, they pay a 22% tax on rental income.
€1,212 Approximate annual costs for
maintenance of an apartment
maintenance of an apartment
Communal payments
Electricity, gas, water, heating, and garbage collection |
€43—165per month |
Internet, TV and telephone |
€40—80per month |
Real estate sellers pay a capital gains tax of 22% on the difference between the sale and purchase prices.
22% Capital gains tax on the sale of
real estate in Iceland
real estate in Iceland
Expenses on the sale
Capital gains taxPaid on the difference between the sale and |
22% |
Frequently asked questions
Can foreigners buy real estate in Iceland?
Foreign nationals who are domiciled in Iceland, as well as European Economic Area nationals, can buy, sell, or rent out real estate without restrictions. But the sale of land to foreigners is prohibited — the land on which the house stands can be long-term rented.
Other types of foreign nationals need to obtain a permit from the minister of justice for buying real estate in Iceland.
How much does an average house cost in Iceland?
The average cost of housing in the country is €4,405 per 1 m². The most expensive housing is in Reykjavik, the capital of Iceland, where the average cost is €6,200 per 1 m².
What tax do you pay when buying Iceland property?
Buyers of real estate in Iceland pay a stamp duty of 0,8%.
Property owners in Iceland also pay an annual municipal tax of up to 1,65% of the cadastral value of the property. The tax rate depends on the municipality.
How long does it take to buy a house in Iceland?
While each instant is unique, real estate buyers in Iceland should estimate a 3—4 week process, from searches for the best property to ownership registration. Note that foreign nationals that are not domiciled in Iceland, or are outside the European Economic Area, need to obtain a permit from Iceland’s minister of justice for buying real estate.
