Árborg cuts residential building fees and abolishes commercial charges

The municipality of Árborg has cut building-right charges for residential plots and abolished them for commercial plots, mbl.is reported. The changes are intended to simplify the fee schedule, make residential plot payments more flexible and encourage commercial development.

Árborg mayor Bragi Bjarnason said reducing municipal charges had been one of the governing majority’s campaign pledges before this spring’s local elections. The Independence Party won a large victory in the election and holds an outright majority on the municipal council.

Building-right charges for residential plots have been reduced by 30 to 40 percent, depending on the municipality’s different settlements. On Selfoss, the charge for residential property was lowered from 35,000 Icelandic krónur to 25,000 krónur per square metre. In rural areas, as well as in Eyrarbakki and Stokkseyri, it was reduced from 25,000 krónur to 10,000 krónur per square metre.

In the most expensive areas, the building-right charge had been about 8,000 krónur per square metre. A minimum charge was paid when construction began, followed by payments based on each square metre built.

“We significantly simplified the fee schedule and want to help reduce construction costs and, hopefully, inflation as well,” Bragi told Morgunblaðið. He said the municipality’s goal was to make it easier for people to own homes and potentially influence Iceland’s economic conditions.

Bragi said Árborg was working closely with developers and knew how many properties entered the market each year. He said the market was quieter and that the municipality wanted to support residents, companies and developers.

He said the measures had received very positive responses, particularly the abolition of fees for commercial plots. Árborg has several detached-house plots available, and Bragi said he hoped the lower charges would help sell them.

The municipality also plans to limit next year’s fee increases to the Central Bank’s inflation target of 2.5 percent, or less.