Correction of property tax assessment for lodging spaces

Housing in Reykjavík

Legal changes effective May 13, 2024, require Class II lodging establishments to operate in registered commercial properties. This change affects tax categories under Article 3 of Act No. 4/1995, and includes rate harmonization and correction.

This correction promotes equality, transparency, and legitimate expectations for operators, aligning with current laws and good administrative practices.

This means certain properties with business licenses were classified in tax category A (0.18%) but should be in category C (1.6%). The correction took effect January 1, 2025, but will not be applied retroactively. A fee notice with the corrected assessment will appear in business owners' digital mailboxes on island.is on January 27.

Equality among business owners

Reykjavík City must harmonize and correct property taxes based on actual property use and ensure equality among Class II lodging operators. Failure to make this correction could lead to further inequality in the future.

More information about the changes is available on the Reykjavík City website.