Interest subsidy
Interest subsidy amounts
By entering your household status and information on income, assets and debt you can calculate your interest subsidy.
Interest subsidy calculator (Icelandic only)Interest subsidy in the 2026 assessment (for interest expenses in 2025)
Type of household | Maximum interest subsity amounts: |
|---|---|
Single individuals | 420,000 ISK |
Single parents | 525,000 ISK |
Married couples and cohabiting partners | 630,000 ISK |
Basis for calculation
The interest expenses used to calculate interest subsidy are the lowest of the following three amounts:
Interest expenses reported in box 87 and/or 166 of the tax return
7% of outstanding loan balances reported in box 41, 45 or 167 of the tax return
The maximum allowable interest expenses, which are:
Single individuals | 840,000 ISK |
Single parents | 1,050,000 ISK |
Married couples and cohabiting partners | 1,260,000 ISK |
Income-based reduction
From the interest expenses calculated above, 8.5% of the income base is deducted. The remaining amount is the calculated interest subsidy.
The income base used to calculate interest subsidy differs from the taxable income base in that it includes capital income and income from international organisations that is not subject to tax. However, special withdrawals of third-pillar pension savings are not included in the calculation.
Asset-based reduction
The calculated interest subsidy is reduced if net assets (assets minus liabilities) exceed the following thresholds:
Single individuals and single parents | 7,500,000 ISK |
Married couples and cohabiting partners | 12,000,000 ISK |
The right to interest subsidy ceases once net assets reach: | |
|---|---|
Single individuals and single parents | 12,000,000 ISK |
Married couples and cohabiting partners | 19,200,000 ISK |
Interest subsidy is divided equally between spouses or cohabiting partners. Payments below 5,000 ISK per person are not made.
Service provider
Skatturinn - Iceland Revenue and Customs