Property Purchase

Support to purchase first property

Effective for 10 consecutive years and the applicant selects the start date. The measure is threefold.

  1. Private pension savings that have accrued over a particular period may be used for the purchase of a first property.
  2. Private pension savings may be used for the principal of the property loan that is secured with a lien in the first property and which was taken for that purchase.
  3. Private pension savings may be used for the payment of instalments on a unindexed loan and toward reducing the principal of a loan that is secured with a lien in the property.

  • These measures are tax free.
  • The maximum amount per year is ISK 500,000 per individual. Maximum 4% from the employee and 2% from the employer.
  • The contribution of the individual must be at least as high as that of the employer.
  • The rightholder must own at least 30% of the residential property, and there may not be more than two buyers.
  • The law applies from 1 July 2017. Private pension savings that have accrued since 1 July 2014, however, may be used for the first-time purchase of a property.
  • Applications are to be sent electronically to Directorate of Internal Revenue.

Click here to check the status of private pension savings at Gildi Pension Fund.

Apply (on the Directorate of Internal Revenue website)

Housing savings

  • Private pension saving may be used to purchase housing for personal use if certain conditions are met (see more information here).
  • These measures are tax free.
  • This applies to paid premiums for wages earned during the period 1 June 2014 to 30 June 2023.
  • An individual can deposit a maximum of ISK 500,000 a year. Employee contribution is 4% and can be a maximum of ISK 333,000 a year. The employer’s contribution is 2%, and it can be a maximum of ISK 167,000 a year.
  • Couples and individuals who meet the conditions for joint taxation can deposit a maximum of ISK 750,000 a year. Employee contribution 4% and can be a maximum of ISK 500,000 a year. The employer’s contribution is 2%, and it can be a maximum of ISK 250,000 a year.
  • Applications are submitted through the website of the Directorate of Inland Revenue once a purchase agreement has been finalised.
Apply (on leidretting.is)

Private savings used to pay a deposit on a loan.

  • The loans must be secured with a lien in residential housing for own use.
  • These measures are tax free.
  • This applies to paid premiums for wages earned during the period 1 June 2014 to 30 June 2023.
  • The application does not apply retroactively. The private savings are paid toward the loan from the month in which the application is submitted.
  • An individual can deposit a maximum of ISK 500,000 a year. Employee contribution is 4% but can be a maximum of ISK 333,000 a year. The employer’s contribution is 2%, but it can be a maximum of ISK 167,000 a year.
  • Couples and individuals who meet the conditions for joint taxation can deposit a maximum of ISK 750,000 a year. Employee contribution 4% and can be a maximum of ISK 500,000 a year. The employer’s contribution is 2%, and it can be a maximum of ISK 250,000 a year.
  • Applications are submitted through the website of the Directorate of Inland Revenue once a purchase agreement has been finalised.
Apply (on leidretting.is)

Good to Know

  • What is private pension savings?

    Private pension savings are additional pension savings and personal pension of the person concerned.

    This is one of the most affordable savings available. An employee who deposits 2–4% of their monthly wage receives a 2% counter-contribution from the employer, which in practice is a pure wage supplement. As with other pension savings, no tax is paid on it until withdrawal.

  • When can I get the private pension paid out?

    Private pension savings can be used from the age of 60, provided that at least two years have passed since the first deposit. You can then withdraw everything at once, receive regular payments or receive single payments when necessary.

  • How are private pension savings invested?

    At Gildi, you can choose between three different investment methods which are based on the interaction of returns and risk together with the different needs and risk appetite of fund members.

  • Do private pension savings affect retirement pensions from the public sector?

    Private pension savings do not affect retirement pensions and income supplements from social security.

  • Can I allocate private pension for housing?

    Private pension savings can be used tax-free when buying real estate or as a deposit for a mortgage if certain conditions are met.

  • Are private pension savings inherited?

    Private pension savings are the personal property of the individual and are fully inheritable by legal heirs and divided according to rules stated in the Inheritance Act. If a fund member does not leave a spouse or children, the private pension goes to the estate.

  • Why should I invest in private pension savings?

    The benefits of private pension savings are many and irrefutable. By placing at least 2% of wages in private property, you receive a 2% matching contribution from the employer, which is actually equivalent to a 2% wage increase.

    From the age of 60, you can withdraw the entire credit at once, receive regular payments or receive single payments when necessary.

Begin private pension savings at Gildi