Property rates discount for pensioners

Reykjavík City may reduce or cancel property rates for low-income old age and disability pensioners. Reykjavík City also grants a discount on the sewerage fee paid to Reykjavík Energy.

What are property rates?

Property rates are levied annually on all real estate property, unless exempt by law, and the owner is responsible for their payment. Property rates comprise property tax, land rent, waste collection fees, and recycling center fees.

How does the discount work?

It is up to municipalities to set their own rules for waiving property rates.

 

The Department of Finance and Risk Management is responsible for processing property tax and sewerage fee discounts after reviewing the tax returns of old age and disability pensioners.

 

Note that no discount is given on land lease fees, waste collection fees and water fees.

Am I entitled to a discount?

To be eligible for the discount you must meet the following conditions:

  • Be an old age or disability pensioner.
  • Be a legal resident of the property.
  • Be a resident of the property.
  • Be the recorded holder of title to the property.
  • Be entitled to interest relief for the property.

What are the income thresholds?

The income thresholds for the reduction of property tax and the sewerage fees in 2024 are:

  • Right to 100% reduction

Individual with income up to 5,380,000 kr.
Jointly taxed individuals with income up to 7,510,000 kr.

  • Right to 80% reduction

Individual with income between 5,380,001 and 6,160,000 kr.
Jointly taxed individuals with income between 7,510,001 and 8,320,000 kr.

  • Right to 50% reduction

Individual with income between 6,160,001 and 7,160,000 kr.
Jointly taxed individuals with income between 8,320,001 and 9,940,000 kr.

The discount rate for old age and disability pensioners when applying property rates in January 2024 is, as a temporary measure, the same as it was at the end of 2023. The levying for income in 2023 will be available in June 2024 and shortly thereafter work begins on calculating the discount. Any changes will be communicated in a letter by the end of October 2024.

Do I need to do something?

There is no need to apply specifically for discounts on these fees. The Department of Finance and Risk Management then makes changes to the property tax and sewerage fee after reviewing the tax returns of old age and disability pensioners.

Discountees who are expecting a refund can enter their bank account details on My Pages. You can also register your bank account details by phone at 411 1111 and by email at info@reykjavik.is.

Cases concerning property rates can be submitted through My Pages.

What laws and regulation apply to the discount?

Municipalities may reduce or waive the property tax that low-income old age and disability pensioners are required to pay pursuant to the fourth paragraph of Article 5 of Act No 4/1995 on Municipal Revenue. Municipalities shall set rules for the application of the authorization. Reykjavík City also grants a discount on the sewerage fee paid to Reykjavík Energy on the basis of the fourth paragraph of Article 4 of Act No 9/2009 on the Construction and Operation of Sewerage Services. The reduction of the property tax and the sewerage fee is based on rules established by City Council, cf. the fourth paragraph of Article 5 of Act No 4/1995 on Municipal Revenue. The rules on interest relief for properties are based on point (B) of Article 68 of Act No 90/2003 on Income and Property Tax. Decisions based on these rules can be appealed to the Ministry of the Interior within three months of the decision, cf. Article 111 of Act No 138/2011 on Local Authorities.

Inquiries

For information on levied property rates and changes to them, please contact the Service Center at 411 1111, via live chat or the email address info@reykjavik.is.