Housing in Iceland

Buying a home

Nordic citizens can purchase housing in Iceland on the basis of rules on freedom of movement of persons, freedom of establishment and freedom to offer services which apply to citizens of the European Economic Area (EEA).

A special fund, the Housing Financing Fund (Íbúðalánasjóður, ÍLS), lends up to 80% of the purchase price of housing for personal use. You can find useful information on the conditions for granting mortgages on the  Housing Financing Fund website.

Citizens of countries in the EEA can purchase housing with a mortgage from the Housing Financing Fund, although they must satisfy certain basic conditions concerning their finances. In addition, in certain cases banks will offer mortgages to finance housing purchases. Bank mortgages can be higher than 80% of the purchase price of housing.

Persons who buy or build their own housing and take out loans to do so can receive a homebuyers' interest subsidy, based on the amount of interest paid and the income and assets of the property owner. The tax authorities calculate and pay the interest subsidy.

All the commercial banks also provide housing mortgages. 

Rental housing and permanent residence rights (Icel. búseturéttur)

The students’ organisations of most universities own residences which are rented to students studying at the school in question. For more information, see the following websites: 

The most common way to find housing is through advertisements on the websites of daily newspapers. Since demand is often high it is a good idea to get in touch as soon as an advertisement appears. On the website of Morgunblaðið, Mbl.is, there are rental housing advertisements, and Visir.is also has rental housing ads. Local newspapers can be a good way to find housing advertisements in rural areas. In addition, several rental agencies have websites, e.g.: Leiga.is and Leigulistinn.is.

The Ministry of Social Affairs (félagsmálaráðuneytið) has information on rental housing, e.g. including lease contracts, general rules on giving notice and on vacating rental premises.

Another housing option is permanent right of residence in housing co-operatives.

The housing co-operative Búseti builds and sells properties with right of residence in Iceland. Only members of the co-op can purchase a residence right. The monthly payment is generally somewhat lower than in the general rental market.

The housing cooperative Búmenn also sells properties with a right of residence but is intended only for persons fifty years of age and over.

In North Iceland, the housing co-op Búfesti in North Iceland offers similar properties.