Reykjanesbær committee approves scrapping building rights fees

The majority of the Independence Party and Centre Party members on the planning committee of Reykjanesbær approved a proposal Friday to abolish building rights fees for residential, industrial, retail and service properties, and buildings in activity areas, mbl.is reports.

The municipality is also working to abolish its infrastructure charges. 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 Progressive Party voted against the proposal.

Reykjanesbær Mayor Vilhjálmur Árnason said abolishing the fees would amount to one of the largest tax cuts a municipality could offer, lowering 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,” Vilhjálmur told mbl.is. “It is also an opportunity for small and medium-sized businesses to begin housing development projects.”

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