Secondary Real Estate in Iceland: A Smart Approach to Buying Pre-Owned Properties

Why Iceland’s Resale Market Appeals to Local and International Buyers

Iceland's real estate market is known for its stability, modern infrastructure, and high standards of construction. While new developments attract attention, secondary real estate — pre-owned homes, apartments, and summer houses — offers an attractive opportunity for both local residents and foreign buyers. Whether you’re relocating, investing, or seeking a vacation property, resale homes in Iceland provide immediate availability, established neighborhoods, and potential cost savings compared to new builds.

In a market shaped by limited land, environmental protection laws, and a highly regulated construction sector, pre-owned properties are often the most practical and efficient way to enter Iceland’s housing market. Buyers benefit from quality construction, existing amenities, and the ability to evaluate the property in a real-world setting. With guidance from VelesClub Int., international and Icelandic clients can safely navigate this niche with clarity and legal security.

Who Buys Secondary Real Estate in Iceland?

1. Icelandic Residents Upgrading or Relocating

Many local buyers choose resale properties when moving between municipalities or shifting life stages. Families seeking more space or professionals moving to Reykjavík often prioritize secondary listings due to location and cost-effectiveness.

2. Foreign Buyers with Special Permits

While Iceland limits property purchases by foreigners, it does allow non-residents to acquire property with permission from the Ministry of Justice — particularly for long-term residents, EU/EEA citizens, or those relocating for work. Secondary real estate is a key entry point due to lower costs and clearer ownership history.

3. Investors Seeking Passive Rental Income

Rental yields in urban areas like Reykjavík and Akureyri are strong, particularly for furnished flats. Resale apartments in multi-unit buildings or townhomes with separate entrances are attractive for buy-to-let strategies.

4. Seasonal Users and Expats

Foreigners with family or professional ties to Iceland often purchase cottages (summerhouses) or urban flats for part-time use. Resale options are easier to secure in remote areas and cost less than new tourist-oriented developments.

5. Developers or Builders Seeking Renovation Projects

Some buyers acquire older homes for modern refurbishment. While Iceland has strict building codes, permits for renovation are easier to obtain than for new construction, particularly in already-developed plots.

Advantages of Buying Resale Property in Iceland

1. Location in Established Neighborhoods

Most resale homes are situated in central urban districts or mature suburban areas — close to schools, transportation, and services. Unlike new developments on city peripheries, resale properties offer better daily convenience and neighborhood cohesion.

2. No Construction Delays

New builds in Iceland are limited by weather conditions, seasonal labor availability, and material imports. Secondary homes allow buyers to move in or begin rental use immediately.

3. Better Pricing per Square Meter

Resale homes may offer better value than brand-new properties, especially in terms of interior space, garden plots, or included amenities such as garages and heating systems. Negotiations are also more common in the resale market.

4. Existing Infrastructure and Quality Verification

Buyers can evaluate insulation, plumbing, heating, and neighborhood dynamics in real-time. Many pre-owned homes have already passed inspection cycles and include reliable technical documentation.

5. Lower Property Tax and Utility Rates

Older properties may fall under more favorable tax assessments, especially outside Reykjavík. In addition, resale homes are often more energy-efficient than expected due to Iceland’s geothermal heating systems and high construction standards.

Popular Regions for Secondary Real Estate in Iceland

Reykjavík Capital Area

The city and its suburbs (Kópavogur, Hafnarfjörður, Garðabær) offer the widest selection of resale properties. Buyers can find everything from 1960s family houses to renovated downtown apartments and modern penthouses. Prices range from ISK 50 million to ISK 200 million depending on size and location.

Akureyri

The second-largest urban center in Iceland offers a vibrant community, strong rental demand, and more affordable pricing. Resale homes with mountain or fjord views are common. Buyers can find townhomes, detached houses, and flats with prices starting around ISK 40 million.

Selfoss and South Coast

This region includes residential homes in Selfoss and summer cottages near Hella, Hvolsvöllur, and Þorlákshöfn. These resale properties are ideal for weekend retreats or tourism rentals, with easier road access from the capital.

Westfjords and North Iceland

Remote and scenic, this area appeals to buyers seeking tranquility or tourism potential. Secondary properties here are priced lower than elsewhere, with homes starting from ISK 20 million. Renovation may be required but returns are promising with eco-tourism growth.

Golden Circle Area

Though less saturated with listings, some resale cottages and land plots are available near Þingvellir, Geysir, and Gullfoss. Foreign buyers often seek these as private retreats or income properties for high-season rental.

Legal Considerations for Resale Buyers

1. Ownership Restrictions for Foreign Buyers

Foreign nationals who are not residents or part of the EEA/EFTA must apply for permission from the Ministry of Justice before purchasing property. Approval is usually granted for long-term residence, business operations, or family reasons. VelesClub Int. handles the entire application process on behalf of clients.

2. Title and Registry Checks

All properties are registered with the Icelandic Property Registry (Fasteignaskrá). Buyers must ensure the title is free of encumbrances, properly documented, and corresponds to the advertised square footage and land use category.

3. Pre-Purchase Inspection

Professional inspections are highly recommended to assess insulation quality, roofing, plumbing, geothermal heating systems, and structural stability. Iceland’s freeze-thaw cycles can impact materials, so technical diligence is crucial.

4. Taxes and Fees

• Stamp duty: 0.8% of property value
• Legal fees: typically 1% of property price
• Registry update fees and notary fees (minor)

Buyers should also budget for bank transfer costs, insurance, and minor refurbishments upon entry.

5. Financing and Currency

Mortgages for foreigners are limited but not impossible. Some Icelandic banks may offer loans to permanent residents or foreign companies with Icelandic registration. Otherwise, most resale transactions are completed in ISK via direct bank transfer.

Challenges of the Secondary Market in Iceland

1. Limited Supply

Due to Iceland’s small population and careful urban planning, the inventory of resale homes is limited. Desirable listings sell quickly, and bidding wars are not uncommon.

2. Harsh Climate Impact

Even well-built homes may face wear from snow, wind, and salt air. Buyers should pay attention to insulation, windows, and exterior finishes — especially in older buildings or coastal zones.

3. Language and Documentation

Most legal documents are in Icelandic, and many sellers communicate primarily in the local language. Legal interpretation and bilingual support from VelesClub Int. ensures no details are missed.

4. Higher Upfront Pricing

While the resale market avoids developer premiums, Iceland’s real estate prices are still high due to limited supply and quality standards. Buyers should set realistic budgets and act quickly on suitable listings.

5. Urban Zoning Rules

Zoning in cities is tightly regulated. Buyers seeking to convert resale homes into guesthouses or split units must confirm municipal approval and local rules in advance.

How VelesClub Int. Supports Secondary Property Buyers in Iceland

• Identification of verified resale properties in all regions
• Legal support with ownership rights, title verification, and zoning approval
• Bilingual communication with sellers and agencies
• Management of Ministry of Justice approvals for foreign buyers
• Professional inspection coordination and renovation consulting
• End-to-end transaction support, including escrow and registration

Conclusion: Iceland’s Secondary Market Offers Practical, Legal, and Lifestyle Advantages

For buyers seeking real homes in real communities — not just developments for tourists — the resale market in Iceland presents authentic, secure, and ready-to-use opportunities. Whether it’s a downtown apartment in Reykjavík, a scenic cottage near Vik, or a suburban family house in Akureyri, pre-owned properties offer flexibility, price stability, and rich potential for personal or investment use.

With VelesClub Int., every step of the resale property journey in Iceland is supported by professionals familiar with the local legal framework, cultural context, and investment goals. Discover Iceland’s secondary real estate options today — and secure your place in one of the world’s most remarkable housing markets.