A homestay permit shall give an individual permission to sell accommodation in his domicile or in one other property owned by him.
Each calendar year, each individual may rent space
for a maximum of 90 days combined
for a maximum of 2,000,000 krónur
Taxes and fees
Registration of home accommodation costs 9,200 ISK and payment is made during the registration process.
Income from home accommodation is taxed as financial income. No deductions may be made against the income. The income must be accounted for in a tax return.
For business income, value added tax and overnight stay tax, see the rules on Iceland Revenue and Customs.
Registration process
Register the property or properties in question.
Processing of applications generally takes a few days and an answer is received by e-mail.
Duration of registration
The registration shall be valid for the entire calendar year.
The registration must be renewed each year if it is intended to continue operations, and then before operations are resumed.
Rules and penalties
Registration of an asset
All rented properties must be registered as home values. If an unregistered property is rented out, the penalties can be an administrative fine of up to one million krónur per violation.
The following applies to the applicant's legal domicile
An applicant does not have to be a registered owner.
Other real estate owned by the applicant applies
Other parties may not have registered domiciles on the property.
If more than one party fulfils the conditions for registration of home accommodation for the same property, whether registration is effected on the basis of a title or domicile registration, their consent shall be available to the registration by all of them.
Home accommodation can only be registered by individuals. Companies and legal entities must apply for an operating licence for the sale of accommodation.
Rental period and rental income
the aggregate number of rented overnight stays may not exceed 90 days per calendar year, regardless of whether one or two properties are registered
rental income may not exceed 2,000,000 krónur in any calendar year, regardless of whether one or two properties are registered
Overnight stays are based on a fixed number and a registered name of the property in question, not the identity number of the person registering the home accommodation. A new party cannot be registered for the same property when the permission for the year is exhausted.
Violations of these rules may be subject to the deregistration of a home accommodation in the name of the party in question, refusal of a new registration the following year and penalties in the form of a fine. It is also possible that the Iceland Revenue and Customs and the municipality will be notified of activities that may be classified as business operations in the housing in question.
Number of rental spaces
These leased spaces may not exceed
in two properties in which the applicant owns or has a registered domicile
maximum five rooms or space for 10 individuals in each property
If more spaces are rented, it is considered a class II accommodation establishment.
Type of rental space
The rental space may be a residential room, apartment or vacation house approved by the building authority.
Marketing
Upon registration, the asset is allocated a registration number which is needed for all marketing and online booking websites.
Violations of rules may be subject to administrative fines of up to one million krónur per violation.
Fire protection
It must be ensured that the premises meet the relevant requirements of fire protection laws and regulations, including that:
Smoke detectors with a sound source are available in each apartment or room where a home is provided.
A fire blanket and fire extinguisher are in the premises.
Statements of escape routes from the property are prominently displayed.
Overview of the location of fire protection measures are prominently displayed.
Regulatory recycling falls into use category 3 and relevant fire safety measures can be further read in byggingarreglugerð nr. 112/2002.
Bathing facilities
There shall be no more than ten persons for each fully equipped bathing facility. The baths shall be well ventilated, and, if used by guests and household members alike, shall consist of only sanitary equipment with the requisite supplies, and a bin with a lid. Priority shall be given to visitors.
Each accommodation room must have facilities for suspending clothes, a waste basket, a sufficient number of towels and a glass of water.
Renting of summer houses
If home accommodation is registered in a summer house, access to drinking water must be demonstrated with certification from health inspectors.
Complaint period
Appeals may be lodged against decisions of the District Commissioner within 3 months of receipt.
Laws and regulations
Lög um veitingastaði, gististaði og skemmtanahald nr. 85/2007
Reglugerð um veitingastaði, gististaði og skemmtanahald 1277/2016
Nánar um hámarkstekjur af leigu eigna í heimagistingu í 4.grein laga um virðisaukaskatt
Nánar um leigu í fjöleignahúsum í lögum um fjöleignahús
Nánar um brunavarnir í byggingarreglugerð nr. 112/2002
Nánar um sköttun á leigutekjur á vef Skattsins
Service provider
District Commissioner of Greater Reykjavik