The value of homes and commercial buildings in Reykjavík has gone up, which may potentially lead to higher property taxes for residents and businesses unless action is taken.
This is according to members of the Progressive Party who want to lower tax rates. This measure is to make sure people don’t pay more just because their property is now worth more on paper.
Their new proposal, submitted to the Reykjavík City Council, calls for a reduction in property tax rates for both residential and commercial properties. The goal is to offset recent increases in property valuations, so that the city’s revenue from these taxes does not rise between 2025 and 2026.
Key points
Naturally, economic news such as this can be a little heady. But here’s a quick breakdown of what the Progressive Party is proposing.
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New property valuations for 2026 are up 9.2% on average. (Without a rate change, this would lead to higher property taxes.)
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Proposed tax rate changes:
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Residential: from 0.18% to 0.163%
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Commercial: from 1.6% to 1.536%
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Land rent: from 0.2% to 0.18%
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Other municipalities in Iceland are planning similar adjustments.
Einar Þorsteinsson, leader of the Progressive Party, said:
“Citizens have had to accept increases in property taxes in recent years, as property valuations have risen enormously.”
He pointed out that Reykjavík ended last year with a budget surplus of ISK 5 billion, and argued that residents should now benefit from this through lower taxes.
“The parties in the majority are not actually fighting for tax cuts, but rather focus on spending,” he added.
The post Progressive Party Calls for Reykjavík Property Tax Cuts appeared first on Iceland Review.
