Municipal property fees differ by more than threefold

Municipalities across Iceland charge widely varying fees to property owners, with the annual difference potentially reaching hundreds of thousands of krónur, according to mbl.is.

Aron Heiðar Steinsson, an operations economist, analysed the figures for a 150-square-metre home with an assessed property value of 80 million krónur. The combined annual cost of property tax, water, sewage and waste collection fees would be 275,000 krónur in the municipalities with the lowest charges and 883,000 krónur where charges are highest.

When the average property price in each municipality is used as the basis for comparison, the gap narrows. The annual fees range from 326,000 krónur to just over 600,000 krónur.

Municipalities use different fee schedules and calculation methods, meaning neighbouring municipalities can produce very different bills.

“Ísafjörður and Bolungarvík, which are neighbouring municipalities, are an example of this, with very different fee schedules,” Steinsson said. Annual water charges for the example home would be just over 4,500 krónur in Ísafjörður but 280,000 krónur in Bolungarvík, a difference of more than sixtyfold.