Table of contents
1. General information about housing in Iceland
It can be challenging to find an apartment suitable for your needs and in your price range. The most popular way of renting in Iceland is from private landlords. You can apply for social housing in your municipality, but there is a shortage of council housing and waiting lists can be long (see more on chapter 5).
Most people rent in the private sector. When you have found somewhere you would like to live, you will be asked to sign a tenancy agreement (more on chapter 3) – lease and pay a deposit (more on chapter 8). You should read the agreement carefully, so you know about the responsibilities involved. The deposit should be returned within 4 weeks after you return the keys to the apartment if no damages have been reported in the property (more on chapter 9).
2. Looking for an apartment
Even for Icelanders, one of the main challenges of living here is finding affordable housing. Asking Icelanders for help, for example, your new colleagues or even friends who have been living here longer is probably the best way to search for a place.
Here are some websites and Facebook groups for rental housing (those groups normally have descriptions both in Icelandic and in English).
Please note that “Höfuðborgarsvæðið” means “the capital area.”
101 Reykjavik is downtown, and 107 and 105 are the postal codes within walking distance of downtown. 103, 104, 108, and 109 are a bit further away but still accessible with public transportation or cycling.
When it comes to the capital area, a significant number of people live in the towns surrounding Reykjavik – e.g. Gardabaer, Kópavogur, Hafnarfjordur. Those areas are normally well-connected with the city centre and the rule of thumb is that the housing in these areas is more affordable and reasonably priced. These areas are popular among families, as they can find more houses big enough to accommodate the whole family, have peaceful neighborhoods, yet are not far away from the capital. In case you do not mind commuting or have a vehicle at your disposal and prefer paying less than in downtown, these towns might be in your interest.
The types of housing that apply to houses and apartments are:
Einbýli – single-family home
Fjölbýli – apartment
Raðhús – row house
Parhús – duplex
Hæð – floor (of a building)
Select the checkboxes after picking which neighborhoods you are interested in the search sites. “Tilboð” means that you can make an offer. Usually, this is only used when they expect a very high price.
Renting property websites:
Morgunblaðið – leiga (accessible in English, Polish and Icelandic)
The Rental List / Leigulistinn (Property searching service – note you have to pay to get access to data base)
www.al.is/ Property renting agency
Bland.is Advertising portal for all kinds of stuff; if looking for an apartment, you need to have an account to be able to contact the advertisers; you can either log in through Facebook or create a completely new account.
www.myigloo.is Igloo is the largest and most secure rental platform in Iceland with hundreds of apartments, houses and commercial space listed every month.
Facebook Groups (in English):
When you find an apartment which is fitting you needs it is recommended to send a short message to landlord including your name, contact information and short note about you and your family (if applied). It is always good to have positive references from your previous landlord.
Lease agreements for housing must be in writing. Also, all amendments to the lease agreement or additions to it, which are permitted under the Housing Lease Act, must be in writing and signed by the parties to the agreement.
The Ministry of Welfare publishes forms for leases. On the one hand for residential housing and on the other for commercial housing.
- English: Lease for residential property húsaleigusamningur á ensku (uppfært 12.11.2020)
- Polish: Húsaleigusamningur á pólsku (uppfært 12.11.2020)
The tenancy agreement must be in two identical copies for the tenant and the landlord.
If the lease agreement has been notarised, the tenant shall have it canceled (aflýsa) when the lease term ends If he has not had it done within a week at the latest, it shall be canceled at the request of the landlord.
You can have your lease notarised (þinglýst) at your local Sýslumaður. It costs 2500 kr.
Lease agreements are discussed in II. section of the Housing Lease Act.
It is worth to mention that a tenant and landlord that only have a verbal lease agreement still have all the rights and obligations according to the Housing lease act. But it is always recommended to have a written lease agreement.
4. Rent price
The price of rent on the open house market is often very high. It is important to be aware of what is included in the rent price. The rent is most of the time fixed when you sign the contract and cannot be changed until the contract runs out.
Sometimes the price covers all but most of the time it is said ex. rent price / Leiguverð 200.000 + media (electricity and water). Ensure if the rent price covers owners´ association costs. It is common practice to connect the rent to consumer price index (CPI) https://hagstofa.is/utgafur/helstu-visitolur/ – the price can change then according to changes of index.
Avoid scammers !!
Never send any money or deposit without seeing the apartment in person or at least through the video chat AND do not believe stories about landlords being abroad and unable to show you the place!
5. Tenants’ rights and responsibilities
As a tenant, you have a right to:
- A written contract -lease that is fair and complies with the law. More about lease on chapter 3.
- Know who your landlord is.
- Live in the property undisturbed.
- Live in a property that’s safe and in a good state of repair.
- Be protected from unfair eviction (being told to leave) and unfair rent.
- Have your deposit returned within 4 weeks after you return the keys to the apartment to the landlord, given there is no unpaid rent or damages.
When you agree to tenancy, you have responsibilities as well as rights.
- Always pay the agreed rent on the agreed date– if you are in dispute with landlord or the property requires repairs, you must still pay the rent, or you will be in breach of your lease, and at risk of being evicted.
- Take care of the property.
- Pay bills as agreed with landlord – be sure if the utility payments (water, heat) are included in the rent (unless stated otherwise, as sometimes you have to take care of the additional bills yourself)
- Give your landlord access to the property – however, your landlord must give you a notice and arrange the reasonable time of the day to come to the property or carry out repairs. You have the right to be in the apartment when the landlord or repair persons are there, unless you come to another agreement
- Pay for repairs if you have caused any damages – this includes damage done by friends and family.
- Do not sublet your property.
- You can only sublet a property if the lease or your landlord allows it.
If you don’t carry out these responsibilities, your landlord has the right to take legal action to evict you.
The landlord’s responsibilities
Your landlord’s main responsibilities include:
- Providing you with a lease.
- Maintaining the good condition of the property.
- Giving you the notice and getting your approval before accessing the property.
Following the legal procedures if he wants you to leave the property, whether it is a legal notice or a termination of the lease
6. Lease Termination
Both parties to a lease that is for an indefinite period may terminate the lease. Notice of termination shall be stated in writing and sent in a verifiable manner.
The notice period for termination of a lease that is for an indefinite period should be:
- One month for both parties in the case of storage sheds and similar types of premises, irrespective of the purpose for which they are used.
- 2. Three months for both parties in the case of single rooms.
- 3. Six months for both parties in the case of „dwellings“– e.g. any type of premises in which a family is able to have normal home facilities.
- Six months for both parties in the case of business premises for the first five years of the rental period, nine months for the next five years after that and then one year after a rental period of ten years.
In case of a definite lease (when both parties have clearly stated for how long the property would be rented) the lease should terminate on the fixed date without any special notice. It may, however, be agreed that such a lease may be terminated due to special grounds, events, or circumstances. These special grounds, events or circumstances have to be stated in the lease and cannot be special grounds that are already mentioned in the housing lease act. If this is the case, the mutual notice period for termination shall be at least three months.
In addition, a landlord who is a legal person that is operated on a non-profit basis may terminate a lease made for a definite period with three months’ notice when the tenant no longer meets the legitimate and relevant conditions set by the landlord for leasing the premises, these being stated in the lease, or fails to provide the information necessary to verify whether he/she meets the conditions. Such terminations shall be made in writing, stating the reason for the termination.
7. Housing benefits and special housing financial support
Housing benefits / húsnæðistuðningur takes the form of monthly payments intended to assist those who rent residential premises, whether this is within the socially assisted housing system, in student residences or in the open rental market.
The Housing and Construction Authority/ Húsnæðis- og mannvirkjastofnun www.hms.is handles the implementation of the Housing Benefit Act, No. 75/2016, and takes decisions regarding entitlement to housing benefit.
As an applicant, you need to know if you qualify for the housing benefits. There are certain requirements that need to be met, and you have to keep in mind that:
- Applicants and household members must be resident in the residential premises and must be domiciled there.
- Applicants for housing benefit must have reached the age of 18. Other members of the household do not have to be aged 18 or over.
- The residential premises must include at least one bedroom, a private cooking facility, a private toilet, and a bathroom facility.
- Applicants must be party to a registered lease valid for at least three months.
- Applicants and other household members aged 18 and over must grant for the gathering of information.
If you are entitled to apply, you can fill in your application either online or on paper. For your convenience, and more accessible applying process, it is strongly recommended to apply online. You can do that through “My Pages” on the official website www.hms.is
Further details about the whole application process can be found here.
If you would like to know the amount you are entitled to get, you can use the official housing benefit calculator available on this website.
Special housing financial support / Sérstakur húsnæðisstuðningur for people in difficult financial situation. For more details please contact social services in your municipality.
8. Social Housing
In Iceland, it is possible to get assistance and housing provided by the local municipalities. Municipalities’ Social Services provide special housing support for residents who are not able to secure homes for themselves due to low income, high cost of supporting dependents or other social circumstances.
Please contact the social services in your municipality for more details and instructions on how to apply.
Deposit is a certain amount of money you have to pay as a guarantee for keeping your apartment in the same condition as it was at the beginning or for unpaid rent. The information about how much money you pay, and in which form, should be included in your lease. The deposit could vary a lot depending on the property and normally equals from one to maximum of three months’ worth of rent.
Before the rented premises are handed over, the landlord may demand that the tenant put up a deposit for the full performance of his/her side of the lease, i.e. for the payment of rent and of compensation for damage to the rented premises for which the tenant is liable according to the provisions of this Act and general rules.
If the deposit is indeed required, it should be provided in one of these forms:
- A guarantee from a bank or comparable party (a bank guarantee).
- A personal guarantee by one or more third parties.
- An insurance policy covering rent payments and the return of the rented premises in good order, purchased by the tenant from a insurance company.
- A deposit paid by the tenant to the landlord. The landlord shall keep this money in a separately marked demand deposit account with a commercial bank or savings bank bearing the maximum available rate of interest until the payment date, and it shall be paid to the tenant if it does not prove necessary to draw on the deposit. No attachment may be made in this money while it is in the landlord’s keeping. The landlord may not dispose of the money or make deductions from it without the tenant’s approval unless a conclusion has been reached establishing an obligation on the part of the tenant to pay compensation. The landlord may, however, use the deposit money to pay outstanding balances of rent, both during the lease period and at the end of the lease period.
- Payment to a landlords’ mutual insurance fund of which the landlord, being a legal person, which lets out premises on a commercial basis, is a member. This fund may only be used to meet damages resulting from default on the landlord’s leases. The landlord shall keep the mutual insurance fund separated from other parts of its operations.
- A deposit of a type other than those listed in points 1–5 above which the tenant proposes, and the landlord accepts as valid and satisfactory.
The landlord may choose between the types of deposit from 1-6 but the tenant shall have the rights to refuse to advance a monetary deposit according to item 4 providing he offers another type of deposit instead which the landlord regards as satisfactory.
10. General damages in the apartment
Prior to this, however, the landlord shall inform the tenant in writing of his/her evaluation of the damages, stating the remedial measures required and giving the tenant four weeks from the date of receipt of such evaluation in which to complete the repairs. Before the landlord has the repairs carried out, he has to seek the opinion of an inspector and seek his approval of the expenses involved after the work has been completed.
11. Joint space and owners´ association
If you are living in apartment buildings, there is always a joint space (sameign). This is for example the laundry room and staircases.
The owners´ association (húsfélag) is taking all of the decisions regarding the building on a formal meeting. Some of the associations hire companies to do the job but others run it be themselves. So, they decide about renovations of joint space or any other major decisions. Tenants can ask to sit these meetings but are not allowed to vote.
In some apartment buildings the owners are expected to take shifts on cleaning the joint space if the owners´ association decide that all the people living in the building must do so. If a tenant is expected to partake in this work, then it should be mentioned in the lease.
12. Where to get help
In case you have some disputes with your landlord, or you are unsure about what are your rights as a tenant, you can contact the Tenants’ Support. The Icelandic Consumers’ Association operates Tenants’ Support (Leigjendaaðstoð) under a service level agreement with the Ministry of Social Affairs. The role of the Tenants’ Support is primarily to provide information, assistance, and advice to tenants on rent-related matters, free of charge.
The Tenants Support’s legal team answers questions and provides guidance when tenants need to seek their rights. If an agreement cannot be reached between the tenant and landlord, the tenant can get help with the next steps, for instance, with taking the case before the Housing Complaints Committee.
Tenants can contact them through e-mail at firstname.lastname@example.org or by calling 545 1200 during the service’s phone hours – between 10.00-12.00 and 12:30 till 15:00 on Tuesdays and Thursdays. Tenants can also book an interview with one of the Tenants’ Support’s lawyers.
Tenants can bring any rent-related questions to the Tenants’ Support, including questions concerning the signing of a lease agreement, rights and obligations during the lease term, and the settlement at the end of tenancy.
You can also check out answers on some frequent questions on their website.
Although looking for accommodation in Iceland might look difficult af first, it is not impossible. It could be a challenging process, but if you know what to expect, you are going to be fine. That is why we prepared this guide! So just hang in there, be patient, and we wish you good luck with your future home!