Legal Restrictions on Property Ownership by Foreign Nationals
There are no legal restrictions on the ownership or sale of property by foreign nationals in Iceland.
Average Property Prices
The average price of a property in Iceland is around ISK 60 million (USD 480,000) but prices can vary greatly depending on location, size and condition of the property. Reykjavik, the capital city, has the highest property prices, with an average price of ISK 75 million (USD 600,000), while prices in smaller towns and rural areas are generally lower.
Popular Locations to Buy Property
The most popular locations to buy property in Iceland are Reykjavik and its surrounding areas, as well as the popular tourist destinations of the Golden Circle and the South Shore.
There are no specific upcoming areas in Iceland that are currently considered attractive options for buying property.
In recent years, there has been an increase in the number of foreign buyers purchasing property in Iceland, particularly in Reykjavik and its surrounding areas. Additionally, there has been a trend towards the purchase of holiday homes and second homes in popular tourist destinations.
Buying property in Iceland can be a good investment, as property prices have been steadily increasing in recent years. However, it is important to consider the current economic situation and fluctuations in the market before making a purchase.
Common Property Types
The most common property types in Iceland are single-family houses and apartments. Townhouses and detached houses are also available, as well as a limited number of villas and rural properties. Land-only properties are also available for purchase, but they are more rare.
Typical House Buying Procedure in Iceland
Surveys and inspections: Before making an offer on a property, it is recommended to have a building survey and an inspection of the property’s electrical and plumbing systems conducted by a professional.
Making an offer: Once you have found a property you wish to purchase, you can make an offer to the seller through your real estate agent or directly to the seller.
Notary: A notary is not typically needed in Iceland for the property purchasing process.
Contract exchange: Once the seller has accepted your offer, a sales contract will be drawn up and signed by both parties. The contract will include details such as the purchase price, closing date and any contingencies. Once both parties have signed the contract, the purchase is considered legally binding.
Closing: On the closing date, the buyer will transfer the purchase price to the seller and the seller will transfer the property’s title to the buyer.
Finding a Reputable Lawyer in Iceland
It is recommended to use a lawyer who specializes in real estate law. The Icelandic Bar Association can provide a list of lawyers who are members. The cost of a lawyer can vary, but it is usually around 2-3% of the purchase price of the property.
Pitfalls and Problems
Language barriers: Many legal documents and contracts are in Icelandic, so it is important to have a translator or fluent Icelandic speaking lawyer.
Limited housing stock: Iceland has a small population and limited housing stock, particularly in larger cities, making it difficult to find a property to purchase.
High prices: Property prices in Iceland have been increasing rapidly in recent years, making it difficult for many people to afford to buy a property.
Purchasing Property Through a Company in Iceland
It is possible to purchase property through a company in Iceland, but it is not a common practice. It may be more desirable for certain tax or legal reasons in some cases, but it’s best to consult with a lawyer or accountant for guidance.