New “AirBnB Law” Approved By Parliament

A new law passed by parliament sets specific limits for renting out your property through AirBnB, with stiff penalties for breaking them.

As the tourism industry booms in Iceland, the construction of hotels and guesthouses is having difficulty keeping up, and some 1,600 locations in Reykjavík alone are listed on AirBnB. Existing regulations on these kinds of rentals have been unclear, however, and AirBnB operators themselves have asked for clearer guidelines in the law. Vísir reports that parliament has delivered.

According to the new law, a person can rent out their property for up to 90 days a year without needing an operation license from the state. At the same time, the gross income from renting out their property cannot exceed 1 million ISK. This effectively means that AirBnB operators cannot charge more than 11,111 ISK per night.

At the same time, prospective renters need to register their property with the county seat every year, at a cost of 8,000 ISK. The property in question also needs to be an established residential property, and fulfill all necessary health and safety requirements as such.

If a renter exceeds the 90 day limit, or if their earnings from it exceed 1 million ISK, the county seat may opt to de-register the property’s permit to operate as an AirBnB. Fines for offenses can range from anywhere from 10,000 ISK up to 1 million ISK.