Planning is a formal, binding plan created by local governments (municipalities) regarding the layout of development and the shaping of the environment. This is done to ensure efficient and sustainable land use.

Planning dictates how land should be allocated, for example, for:

• residential areas

• vacation homes

• commerce

• nature conservation

• or agriculture.

Plans include decisions about the layout of streets and plots. They establish rules for building design, such as the maximum number of floors, construction materials, roof forms, and the number of residential units.

Local planning plans

Municipalities prepare three types of planning documents:

• Regional plan: A coordinated strategy between two or more municipalities regarding shared interests, such as urban development, transportation, or water protection.

In Icelandic: Svæðisskipulag.

• General plan: The municipality's overall policy for land use, nature conservation, and development across the entire municipal area.

In Icelandic Aðalskipulag

• Local plan: Detailed planning for a specific area, such as a neighbourhood or street block, which includes detailed planning terms for building patterns, plots, buildings, and more.

In Icelandic: Deiliskipulag.

These planning documents must be mutually consistent. The Regional plan takes precedence over the General plan, and the General plan takes precedence over the Local plan. All planning must adhere to the National Planning Policy or landsskipulagsstefna.

Regional, General, and Local Plans must be prepared digitally using a standardised geographical information system.

Permits

Building permits and development permits must be based on, and comply with, these plans.

Roles of parties in the planning process