Payment plans for statutory debt collection of property rates for commercial property

The transitional provisions of Chapter II of Act No. 22/2021 state (This translation is unofficial and provided for informational purposes only. In the event of any discrepancies, the Icelandic text will be deemed the official and binding version):

Notwithstanding the provisions of Article 32, municipalities may reduce or waive late interest on claims for property taxes levied under point (c) of the third paragraph of Article 3, in the years 2020-2022, for payers who have significant operating difficulties due to the coronavirus epidemic or payers who rent premises to operators subject to the same conditions, on the basis of rules established by municipalities.

Regular payments are expected while the payment plan is in effect. During the payment plan, the monthly payments can be either fixed or variable as long as the payer demonstrates a willingness to pay.

• The validity period of a payment plan for property taxes for the year 2020 can be until March 2023 at the latest.
• The validity period of a payment plan for property taxes for the year 2021 can be until March 2024 at the latest.
• The validity period of a payment plan for property taxes for the year 2022 can be until March 2025 at the latest.

If you anticipate that you will not be able to make the scheduled payments under the payment plan, you must contact the debt collection agency to revise the payment plan.

Late interest will be charged on all outstanding debts under the payment plan. However, if you make timely payments according to the payment plan, the City of Reykjavík will provide a 40% discount on the late interest that is due at the end of the payment plan.

To qualify for a payment plan for commercial property taxes for the years 2020-2022, your income must have been at least 40% lower than your average income in 2019 and the decrease must be due to the coronavirus pandemic or government measures to prevent its spread. The payer must submit a confirmed application for an economic hardship grant from Iceland Revenue and Customs showing the calculation for the drop in income in accordance with Act No 118/2020 on Economic Hardship Grants or other lawful documents that prove at least a 40% drop in income. If the payer rents premises to an operator who has suffered a significant drop in income due to the coronavirus pandemic, the payer must submit a confirmed application for the tenant's economic hardship grant showing the calculation for the drop in income in accordance with Act No 118/2020 on Economic Hardship Grants or other lawful documents that prove at least a 40% drop in income, as well as a copy of the notarized lease.

The payer may not be in arrears with real estate taxes that were due before the end of 2019.

You can apply for a payment plan through the property tax portal.

You will need to provide the following documentation with your application:

• A confirmed application for an economic hardship grant (I. tekjufallsstyrkur) from Iceland Revenue and Customs under Act No 118/2020

and/or

• Annual accounts for 2019 and 2020 to assess the fall in income
• A notarized rental agreement if applicable.

Gjaldheimtan Debt Collection, which handles statutory debt collection for the City of Reykjavík, will be responsible for creating payment plans if you meet the requirements.

• Submit a case on property rates