Purchase of residential property in Grindavík

Individuals who own residential property in Grindavík can sell it to the government-owned real estate company Þórkatla. The application deadline is March 31, 2025.

Those who cannot use the digital application are advised to get in touch through a form of communication, people will then be contacted.

After the application has been sent in, it goes to the District Commissioners for administration on behalf of Fasteignafélagið Þórkatla, who takes care of the purchase, and administration of the residential property.

Those who decide not to sell their property to Þórkatla real estate company are still entitled to compensation from NTÍ if their property is damaged by a natural disaster.

Eligibility

Conditions that apply to the property owner

• The registered owner must be an individual or an estate (of a deceased person).

• The registered owner must have a legal domicile in the property on November 10, 2023. Owners can apply for an exemption if they had temporary domicile elsewhere on that date. Those who are exempt from legal domicile registration at this time are advised to turn to the district commissioners office with their application.

Conditions that apply to property

• The property must be residential.

• The property may be fully built or still under construction. Properties under construction must be insured with a special fire insurance for properties under construction.

• The property must be located within the urban limits of Grindavík according to the master plan of the municipality.

• The building may be assessed as unrepairable by Iceland's Natural Disaster Insurance and compensation has been settled. Then the property ownership is transferred to Þórkatla real estate company without payment.

Selling price

Fully built properties

The selling price is 95% of the property's fire insurance value on the date of sale.

You can check the property's fire insurance value in the real estate register.

Properties under construction

For properties under construction, the selling price is 95% of the estimated rebuild cost based on the construction stage.

Payment

Payment to the seller is the sales price minus the following:

Mortgage debts

If the seller wants the real estate company Þórkatla to take over the mortgage, it will be deducted from the payment.

If debts are overdue at the time of the sale, the seller must settle them at the same time, just like in traditional real estate transactions.

Paid benefits from NTÍ

If Íslands Natural catastrophe insurance has already paid insurance benefits for the housing, they will be deducted from the payment.

Past due debts

Debts that are due at the time of the purchase and are related to the ownership of the residential property, for example housing association fees, must be settled by the seller.

Property value has decreased

When determining the amount of payment, it is taken into account if the value of the property has decreased due to the actions of the seller before the agreement was reached.

Value can, for example, decrease if the owner removes the property's so-called collateral, items that should be included with the sale. This can include cabinets, stove, oven and other appliances, curtains, lights and more.

Sales fees

The real estate company Þórkatla bears the costs of the transaction, not the seller, as is customary in real estate transactions.

Sales process

Application

You can apply until December 31, 2024.

Those who cannot use the digital application will be able to book an apply at the district commissioners offices and get help with their applications.

In the application process you can

- request priority rights to purchase or lease the property later
- specify the desired hand-over date, between 1-3 months after the purchase agreement

The real estate company Þórkatla receives all applications. If the application turns out to be insufficient or if additional data is needed, this will be reported in writing and the seller will be given a deadline to make improvements. Otherwise, the application will be rejected.

Purchase agreement

Purchase contracts that are signed electronically will also be registered electronically.

Payment

Payment will be received upon signing of the purchase agreement.

During the sale, 5% of the price is retained to settle unpaid fees. It will be paid in full upon relinquishment if no debts or asset impairments are found.

Handover

Handover is 1-3 months after signing the purchase agreement. The buyer selects a delivery time during the application process.

Closing

The deed will be finalised one month after handover.

The seller then receives the closing payment, which is 5% of the selling price. Unsettled real estate taxes, house association or fire insurance fees or other claims that were overdue on the handover date will be deducted.

Process example

A couple chooses to apply for Fasteignafélagið Þórkatla to buy their residential property. They own the property together and their shares are divided equally.

The property's fire compensation assessment is 45 million and their ownership share is 30 million.

Complaints

The construction is based on the law on the purchase of residential property in Grindavík.

The provisions of the Administrative Law apply only to the company's decisions regarding the purchase of residential property pursuant to Article 3 and on the granting of priority rights according to Article 4. Parties to a case may appeal decisions based on Articles 3 and 4. of the Act to the Arbitration Committee for Natural catastropy insurance of Iceland.