| Rule | Details |
|---|---|
| Regulatory Status | Restricted — rules apply |
| Permit / License Required | Home accommodation registration with Icelandic Housing Agency; District Commissioner of Greater Reykjavík handles licensing |
| Tax Rate | Financial/capital income for home hosting; business + VAT + lodging tax above limits |
| Night / Day Cap | 90 days/year for non-licensed/home-hosting properties |
| Minimum Stay | No minimum-stay requirement |
| Permit Fee | Registration ~9,200 ISK annual (national) |
| Penalties | Administrative fines up to 1,000,000 ISK per violation; delisting |
| Primary Residence Required | Domicile-based home hosting (plus one additional property) |
| Occupancy Limit | Max 5 rooms / 10 guests per property (national) |
Short-term rentals in Reykjavik are allowed but subject to significant restrictions under local regulations as of 2026. Hosts operating on Airbnb, VRBO, or other vacation rental platforms must obtain proper licensing: Home accommodation registration with Icelandic Housing Agency; District Commissioner of Greater Reykjavík handles licensing. The associated permit fees are Registration ~9,200 ISK annual (national).
Short-term rental operators in Reykjavik should be aware of these tax obligations: Financial/capital income for home hosting; business + VAT + lodging tax above limits. Yes (national rules).
Key operational rules for vacation rental hosts in Reykjavik include: Primary residence requirement: Domicile-based home hosting (plus one additional property). Rental day cap: 90 days/year for non-licensed/home-hosting properties. Occupancy limit: Max 5 rooms / 10 guests per property (national). Minimum stay: No minimum-stay requirement.
Zoning considerations for short-term rentals in Reykjavik: 2024 reform restricts business entities from STR in residential housing in Capital Region. Density rules: 2M ISK income cap; max 2 properties per individual.
Hosts who fail to comply with Reykjavik's short-term rental regulations may face enforcement action. Administrative fines up to 1,000,000 ISK per violation; delisting.
Platform obligations for services like Airbnb, VRBO, and Booking.com operating in Reykjavik: Registration number required in listings; District Commissioner of Greater Reykjavík enforces.
Apply for your STR permit or registration directly through the official government portal.
Official Source ↗Airbnb and short-term rentals are legal in Reykjavik but subject to restrictions. Hosts must comply with local permit requirements and zoning rules. Commercial STR licenses limited to commercially-zoned units; downtown conversions targeted
Yes. Reykjavik requires the following for short-term rental operation: Home accommodation registration with Icelandic Housing Agency; District Commissioner of Greater Reykjavík handles licensing.
Short-term rental hosts in Reykjavik are subject to the following tax obligations: Financial/capital income for home hosting; business + VAT + lodging tax above limits.
Hosts who operate without proper permits in Reykjavik may face enforcement. Administrative fines up to 1,000,000 ISK per violation; delisting.
Reykjavík is focus of Iceland's STR restrictions due to housing crisis
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