Iceland The housing market in Iceland provides opportunities for buying a house overseas, although it is not the traditional `Place in the Sun' that people usually seek.

The European Economic Area (EEA) is made up of those countries who are full members of the EU, plus Iceland, Liechtenstein and Norway. As an EEA national, you have the right to live in any EEA country.

Iceland and the EEA and EU Including Links to Icelandic government sites and Tourist Information

As result of the financial situation in Iceland, many attractive opportunities are presenting themselves and conditions for investors are very favourable at this time. Because of the favourable foreign exchange rate investors with foreign currencies have far more purchasing power. In the last 12 months property prices in Iceland have gone down by 21% because of the crisis. There is an urgent need for foreign currency and many interesting opportunities have surfaced as a result of bankruptcies. Land prices have also plummeted and the availability of prime sites at lower prices has increased. Prices in the construction industry have fallen increasing competition and bidding wars in the construction and service sectors.

In spite of all this, future prospects are good in the medium term. The International Monetary Fund and other financial institutions are predicting a full recovery within a number of years. If you have been waiting for a good investment opportunity to come your way then investment property in Iceland will give you fantastic returns.

Investing in a foreign country is always a complex procedure. Buying a property in Iceland involves dealing with many complexities and local idiosyncrasies and you will need a qualified local agency to handle all this. You will need to contact an agency which has the experience of handling transactions in an international context and which can act on behalf of their overseas clients to make the whole process smooth, understandable and reliable. It is essential that their core business is advisory in property purchases, and that they have the relevant experience in setting up property companies and holding companies, and related activities. They have to be legally qualified and chartered for handling sales of commercial and domestic property, ships and automobiles. They should be able to handle all or part of the purchase or sale of land and property.

If you are contemplating buying property in Iceland then look for someone that can offer practical assistance in assessing, preparing and realising investments, particularly those involving property purchases. A company that offers comprehensive and flexible range of services will help you to identify and realise some of the many opportunities that are undoubtedly there.

Once you have found a property what next? Having found that ideal property the first thing a property purchaser does in Iceland is to ask their chosen agent to obtain a paper certificate of mortgages, charges, and other possible rights and obligations in relation to the property that is to be purchased. This can be done by a visit to the District Magistrate (Land Registry) and will cost ISK 1000, but as most agents have on-line access to this information the same information can be achieved on-line from the Landskra Fasteigna (a data information service) at a cost of ISK 550. What this does is to show what charges if any are lodged against the property.

Your agent then prepares the sales contract which you, (the purchaser) and the seller sign, and you both confirm the agreed price and the conditions of sale.

It is not mandatory to use an agent, but it is almost an absolute necessity as he/she  will need to have local knowledge and speak the language and that he/she will be able to look after your interests. Fee’s for this service should be between 1.5% and 2.5% of the properties value.

The purchaser/seller agreement, if not paid in full at the time of signing, is registered at the District Magistrate. The new title deed will not be signed until the purchase price is paid in full. Registration of this agreement protects the rights of the property purchaser.

Registration: The conditions for registry of the purchase agreement are:

1.      It contains the name of the property as officially registered by the municipal authorities

2.      The reference number of the land and the property

3.      The legal description of the property as laid out by the planning and building authorities

4.      The land and buildings number which has direct reference to its plots.

This information is obtained from the magistrate's office in the area where the property is situated, or your estate agent can obtain this from the Landskra Fasteigna.

The transfer and new registration of the title deed takes place at the Magistrates Office when all monies are in place; this costs ISK 1350, plus 0.4% of the official real estate valuation official real estate valuation.

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Disclaimer: This guide is for information only and should not be relied upon as definitive. Details have been obtained from various sources and although we have done everything possible to ensure that it is correct, we cannot accept responsibility for it or guarantee its accuracy. This is because processes and laws change frequently, and may vary dependant upon personal circumstances. You are welcome to use the information provided, but should always obtain confirmation of specific details and get independent specialist and legal advice in the country that the information refers.

04-09-2009