Rent Increases in Iceland (2026 Legal Guide) — Rules & Requirements
About this article
Sourced from Icelandic Acts of the Althingi, statutory instruments, and official guidance. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
What is this right?
Iceland controls rent increases through the Rent Act, which was significantly tightened by the 2024 and 2026 amendments:
- Fair rent: Rent must be "fair and reasonable from the point of view of both parties" (Article 34).
- Lock on short-term leases (Lög nr. 106/2024, in force 1 Sept. 2024; further amended by Lög nr. 72/2025, in force 1 Jan. 2026): Rent on fixed-term leases of 12 months or less may not be changed at all. After 12 months, the only valid grounds for an increase are those listed in Articles 37a-37c — verified cost increases, market adjustments or equity adjustments for not-for-profit landlords.
- Mandatory registration in the HMS rent register (Article 37(6)): All rent changes must be registered in the HMS rent register; landlords can face penalties under Article 5a if they fail to register.
- New tenant remedy (Article 35, added by Lög nr. 94/2023): Tenants who lose the use of a property because of removal orders are entitled to a proportionate reduction in rent.
- On open-ended leases, rent can generally be increased once a year, usually linked to inflation (the consumer price index).
- To increase rent beyond what the lease provides, the landlord must either obtain the tenant's consent or terminate the lease with the statutory notice and offer a new lease at a higher rent. The landlord bears the burden of proving that the previous rent was below the fair market price.
Iceland has no formal rent board — rent is market-linked but governed by a fairness standard and the limits above.
When does it apply?
- Your landlord proposes a rent increase at some point during the tenancy.
- The protection against short-term leases applies to fixed-term leases of 12 months or less.
What to do if a landlord raises the rent unlawfully in Iceland
- Check your lease — any increase must follow the lease provisions or the statutory rules.
- If you have a fixed-term lease of 12 months or less and the landlord raises the rent, refuse it in writing — it is prohibited.
- If you believe a rent increase is unfair, contact Kærunefnd húsamála.
What should you NOT do?
- Don't accept increases within the lease term that are not permitted by the lease or the law.
- Don't pay an unlawful increase — keep paying the original rent and formally dispute the increase.
About Housing Rights in Iceland
Your tenancy relationship in Iceland is governed by Húsaleigulög (the Rent Act, Lög nr. 36/1994). Leases must be made in writing and registered with Húsnæðis- og mannvirkjastofnun (HMS, the Housing and Construction Authority). The security deposit is capped at 3 months' rent. On open-ended leases the landlord must show legitimate grounds to terminate. Habitability requirements are set out in Lög um mannvirki (the Construction Act, Lög nr. 160/2010) and Building Regulation nr. 112/2012. Disputes go first to Kærunefnd húsamála (the Rent Appeals Committee), with the option of appeal to the district court. Low-income tenants can use municipal rent benefits.
Common Questions
Can my landlord raise the rent in Iceland?
Under Article 34 of the Rent Act, rent must be fair and reasonable from the point of view of both parties. For fixed-term leases of 12 months or less, rent changes — including index-linking — are entirely prohibited under the 2024 amendments. For open-ended leases, rent can generally be raised once a year, usually linked to the consumer price index.
How does Iceland protect short-term-lease tenants from rent increases?
The 2024 amendments entirely prevent rent changes — including index-linking and price adjustments — during fixed-term leases of 12 months or less. If your landlord raises the rent on such a lease, refuse the increase in writing. Keep paying the original amount and formally dispute the increase with Kærunefnd húsamála.
How do I dispute an unfair rent increase in Iceland?
Check your lease — any increase must follow the agreed provisions or the statutory rules. Contact Kærunefnd húsamála. To raise rent beyond what the lease provides, the landlord must either obtain your consent or terminate the lease with the statutory notice and offer a new lease; the landlord bears the burden of proving that the previous rent was below the fair market price.
What is the rent increases right in Iceland?
Iceland controls rent increases through the Rent Act, which was significantly tightened by the 2024 and 2026 amendments:Fair rent: Rent must be "fair and reasonable from the point of view of both parties" (Article 34).Lock on short-term leases (Lög nr. 106/2024, in force 1 Sept. 2024; further amended by Lög nr. 72/2025, in force 1 Jan. 2026): Rent on fixed-term leases of 12 months or less may not be changed at all. After 12 months, the only valid grounds for an increase are those listed in Articles 37a-37c — verified cost increases, market adjustments or equity adjustments for...
When does it apply — rent increases?
Your landlord proposes a rent increase at some point during the tenancy.The protection against short-term leases applies to fixed-term leases of 12 months or less.
What should I do if my landlord has raised my rent within the lease term in Iceland?
Check your lease — any increase must follow the lease provisions or the statutory rules.If you have a fixed-term lease of 12 months or less and the landlord raises the rent, refuse it in writing — it is prohibited.If you believe a rent increase is unfair, contact Kærunefnd húsamála.
What should you NOT do — rent increases?
Don't accept increases within the lease term that are not permitted by the lease or the law.Don't pay an unlawful increase — keep paying the original rent and formally dispute the increase.