Short-Term Rentals To Be Limited To Legal Residence

On March 13, the government published a drafted bill to limit short-term rentals exclusively to individuals’ legal residences. With the bill, the government aims to better ensure equilibrium in the housing market and that apartments will be used as people’s homes, as opposed to investment opportunities.

The government also proposes that all outstanding business licenses within urban areas will be valid for five years at a time. According to the current law, these licenses are permanent.

According to the Icelandic Housing and Construction Authority (HMS), 67% of apartments rented out on Airbnb are owned by multiple-property landlords. Since 2021, the portion of landlords leasing more than 10 properties on Airbnb has increased from 10% to 28%.

On March 11, RÚV reported that about five percent of people own roughly 30% of all available housing in Iceland.