Housing benefits

Each year, a final settlement of housing benefits is carried out for the previous year.
The settlement is calculated once a confirmed tax return is available, which is usually around the end of May or beginning of June.

During the settlement, housing benefits are recalculated based on the actual income and assets for the relevant year.

• If you received lower benefits than you were entitled to according to the final calculation, an underpayment (credit balance) is created.

• If you received higher benefits than you were entitled to, an overpayment (debt) is created and must be repaid.

Credit balance

If the final settlement shows that you have a credit balance:

• The amount will be paid into the bank account registered in your housing benefits application.

Debt

If the final settlement shows that you received excess housing benefits, the following rules apply:

If you still receive housing benefits

• Overpayments exceeding ISK 150,000 are not automatically offset against future payments.

• Overpayments below ISK 150,000 are automatically deducted from upcoming payments.

• No more than 25% of your monthly benefits will ever be deducted in a single month.

• You may also request a payment claim and repay the full debt immediately.

  • To request this, please contact hms@hms.is

If you no longer receive housing benefits

• You may request a repayment plan for the debt, for up to 12 months.

• Each payment must be at least ISK 10,000.

Income limits and housing benefits amount in 2025

Income limits and maximum benefit amounts vary depending on:

• The number of household members, and

• The period within the year, as changes take effect on 1 September.

January 1 - Agust 31 2025

September 1 - December 31 2025

Asset limit of the year of 2025:

Applicants’ assets affect their entitlement to housing benefits. When assets exceed certain limits, the benefits are reduced.

January 1 - desember 31
Minimum asset limit: 12,5 million ISK.
Maximum asset limit: 20 million ISK.