Reykjanesbær committee approves plan to scrap building rights fees

The majority of Reykjanesbær’s planning committee has approved a proposal to abolish building rights fees for residential, industrial, retail and service premises, as well as buildings in activity areas, mbl.is reports.

The municipality will also work to repeal its regulations on infrastructure fees. The planning committee’s decision is expected to be confirmed by the municipal council at its next meeting on September 1.

Two representatives of the Social Democratic Alliance and the Progressive Party voted against the proposal.

Vilhjálmur Árnason, mayor of Reykjanesbær, said the abolition would amount to one of the largest tax cuts a municipality could offer, reducing construction costs for families and small and medium-sized businesses.

“This is a huge tax cut, and we want to show that Reykjanesbær is a town of opportunities for families who want to acquire a home affordably,” Árnason told mbl.is. “It is also an opportunity for small and medium-sized businesses to begin housing construction projects.”

The building rights fee for residential housing in Reykjanesbær has been 35,000 Icelandic krónur per square metre since the municipality’s infrastructure fee regulations took effect on June 4, 2024. For a 150-square-metre home, the fee amounts to 5.25 million krónur. Under the proposed change, that cost would be eliminated.