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Iceland: visas, tax & cost of living

Moving to Iceland as a remote worker: Iceland scrapped its remote-work visa in May 2026, plus honest Reykjavik costs, tax residency, healthcare and banking.

Iceland: visas, tax & cost of living
Your passport

United KingdomIceland

Your move to Iceland on a United Kingdom passport

  • VisitEasyVisa-free entry
  • NomadMediumNo nomad visa, other route
  • RelocateMediumResidence with conditions

Visiting

Visa-free for up to 90 days. Travel on a passport valid for your whole stay, with a return or onward ticket and proof you can support yourself.

Passport validity: Passport valid for at least 3 months beyond your intended departure and issued within the last 10 years.

Heads-up: The EU Entry/Exit System (EES) started a phased rollout on 12 October 2025 and has been fully operational, replacing passport stamps, since 10 April 2026. ETIAS is not running yet: the European Commission says no start date has been set and that it will be announced several months beforehand, with the fee set at 20 euros.

At the border: Passport, proof of onward or return travel, sufficient funds, and accommodation details may be requested.

Working remotely

No dedicated nomad visa; the usual route is a standard residence permit.

Tax and residency

Staying longer than 183 days in total in any 12-month period makes you tax resident with unlimited liability on worldwide income, and ordinary absences such as holidays still count towards that total (Income Tax Act no. 90/2003, art. 1). Being domiciled in Iceland makes you resident whatever the day count, and non-residents are taxed only on Icelandic-source income. If you leave and cancel your Icelandic domicile, Iceland can still tax your worldwide income for three years from the New Year following your departure unless you show you are taxed as a resident somewhere else. (estimate)

The UK decides residence with its Statutory Residence Test (days in the UK plus your ties). As a non-resident you are usually taxed only on UK income; where one exists, a double-tax treaty with the destination decides who taxes what.

Practical

Currency: ISK. Cost of living: high.

Healthcare: Public healthcare needs a registered legal domicile, and cover normally starts only three months after Registers Iceland records that domicile, so you need private insurance in the meantime. People arriving from the EEA, the UK, Switzerland, the Nordics, Greenland or the Faroe Islands who were insured there can be covered sooner. A short-term residence permit does not allow you to register legal domicile at all, so it never leads to public cover.

Driving: EEA/EU licences are valid; many non-EEA visitors can drive on their home licence short-term, but an International Driving Permit is a useful backup.

Sources: Directorate of Immigration - Short-term residence permit · Directorate of Immigration - Visa services transferred to the Ministry for Foreign Affairs (13 May 2026) · Althingi - Act on Foreigners no. 80/2016, art. 21 (short-term residence permit) · Althingi - Visa Act no. 37/2026 · Althingi - Income Tax Act no. 90/2003, art. 1 (tax residence) · Skatturinn - Iceland Revenue and Customs (tax) · Iceland Health - Health insurance when moving to Iceland · European Commission - Entry/Exit System (EES) · European Commission - ETIAS · GOV.UK: tax on foreign income · HMRC: double-taxation treaties

Estimates, not advice. Confirm with the official sources before you act.

Should you move to Iceland?

Iceland is the kind of place that ruins your camera roll for every other country. Glaciers, black beaches, geothermal pools you can sit in while it snows on your head, and a capital, Reykjavik, that feels more like a creative small town than a European capital. For a remote worker it is safe, clean, English is spoken almost everywhere, and the internet is genuinely excellent. If your work runs on a laptop and a stable connection, the practical side just works.

The catch is the price, and the isolation. Iceland is one of the most expensive countries on earth to live in day to day, and there is no cheap corner to retreat to. Almost everyone settles in Reykjavik or the neighbouring towns of Kopavogur and Hafnarfjordur, because that is where the jobs, cafes and coworking spaces are. Akureyri in the north is the only real second option. Winters are dark (a few hours of light in December) and the wind can be genuinely violent. Summers, by contrast, barely get dark at all.

A realistic single-person budget in Reykjavik lands somewhere around 500,000 to 650,000 ISK a month once you include rent, or very roughly 3,000 to 4,000 EUR. It suits people who earn well, love the outdoors, and want quiet and safety over nightlife and variety. It does not suit anyone trying to stretch a modest income.

Cost of living in Iceland

Rent is the number that shocks people. A one-bedroom flat in central Reykjavik runs roughly 270,000 to 350,000 ISK a month, averaging around 304,000 ISK (close to 2,000 EUR), according to Numbeo’s Reykjavik data. Everything else stacks on top of that. Numbeo puts a single person’s monthly costs excluding rent at roughly 197,000 ISK, which is high by any European standard.

Groceries are steep because so much is imported: expect around 250 ISK for a litre of milk, roughly 530 ISK for a loaf of bread, and about 3,000 ISK per kilo of chicken. Eating out is a treat, not a habit. A meal at a cheap restaurant is around 3,500 ISK, and a three-course dinner for two at a mid-range place lands near 16,500 ISK before drinks (alcohol is taxed hard, so a beer out can be 1,500 ISK or more). The upside: tap water is superb, geothermal heating keeps utility bills lower than the climate suggests, and the swimming pools that double as the country’s social life cost only a few hundred krona. Treat all of these as ballpark figures and verify current prices before you go.

Iceland no longer has a remote-work visa

Iceland used to run a genuinely specific remote-work route, and a lot of pages still describe it as if it were live. It is gone. The Visa Act no. 37/2026 took effect on 12 May 2026 and repealed the long-term visa provision of the Act on Foreigners, and the next day the Directorate of Immigration (Utlendingastofnun) confirmed that it no longer issues those visas and that ordinary visa work has moved to the Ministry for Foreign Affairs. If you find a page describing a 180-day Icelandic visa for remote workers with a million-krona income bar, you are reading something that expired.

What took its place is not a substitute. The short-term residence permit does cover stays beyond 90 days, but only for close family members making an extended visit and for artists, scientists or athletes. It runs 180 days at most, cannot be renewed or extended, is granted only once in any 12-month period, and its holders are not authorised to work except in a few narrow cases. It does not let you register a legal domicile either. An application is refused outright if your real purpose belongs under some other permit, so applying as a remote worker is not a quiet workaround.

So here is the honest position today. If your passport is visa-exempt for Schengen (American, Canadian, Australian and similar), you work from Iceland on the standard 90 days in any 180 and then you leave. If you are not visa-exempt, you apply for a Schengen short-stay visa. EU/EEA citizens are untouched by all of this: free movement still lets them live in Iceland and simply register locally. Our digital nomad visa checker is a quick way to see which countries still run a real route.

Tax residency and the 183-day rule

Iceland draws its tax line at time in the country. Stay longer than 183 days in total within any 12-month period and you become tax resident with unlimited liability, meaning Iceland can tax your worldwide income, under article 1 of the Income Tax Act no. 90/2003. Normal absences count towards that total, so a fortnight away does not reset the clock. Stay under the line and you have limited liability: only Iceland-sourced income is taxed, which is how Iceland Revenue and Customs (Skatturinn) frames it in round numbers as a six-month test.

Two things that test does not tell you. Having a domicile registered in Iceland makes you resident whatever the day count, so the calendar is not the only trigger. And it runs on the way out as well: if you leave and cancel your Icelandic domicile, Iceland can still tax your worldwide income for three years from the New Year after you go, unless you can show you are being taxed as a resident somewhere else.

Rates are not gentle. For 2026 the brackets run from about 31.49% on income up to 498,122 ISK a month, to roughly 37.99% up to 1,398,450 ISK, and around 46.29% above that, with a monthly personal tax credit of about 72,492 ISK that reduces the bill. Treat those as sourced estimates and confirm the current figures with Skatturinn. If you might tip over the residency line, or you already pay tax at home, double-taxation treaties matter a great deal here. This is educational, not advice: run your own numbers with our tax residency checker and then confirm with a qualified Icelandic accountant before you file anything.

Healthcare and insurance

Iceland’s public system is excellent and universal for residents, run through Iceland Health (Sjukratryggingar Islands). The important detail for newcomers: you first need a legal domicile registered with Registers Iceland, and cover normally starts three months after that registration. People arriving from the EEA, the UK, Switzerland, the Nordics, Greenland or the Faroe Islands who were insured there can be covered sooner. Until you are covered you pay the full price for care, so carry private insurance. Anyone on a short-term residence permit never reaches cover at all, because that permit does not allow a legal domicile in the first place.

The main hospital is Landspitali, the National University Hospital in Reykjavik, backed by regional hospitals and local health centres (heilsugaeslan) for everyday care. Standards are high, but the country is small, so waiting times for non-urgent specialists can be long and some complex care is referred abroad. Budget for solid travel or expat health insurance covering the full stay; premiums vary widely by age and cover, so get quotes rather than trusting a single figure.

Money, banking and settling in

Iceland is about as cashless as it gets. Cards and contactless work everywhere, from the smallest guesthouse to the parking machines, so you can land and function on your existing bank card and a service like Wise for the first weeks.

Opening a local account is the fiddly part. The banks (Landsbankinn, Islandsbanki and Arion Banki are the big three) will want your kennitala, the national ID number that unlocks almost everything in Iceland, from a phone contract to a gym membership. Getting a kennitala is straightforward for registered residents but murkier on a short stay, so ask the bank directly what they accept before you queue up. Beyond that, settling in is easy by expat standards: sign up for a swimming pool pass, learn a few words of Icelandic even though everyone speaks English, and accept that the weather, not bureaucracy, will be your real adversary.

Figures are estimates. Always check the official source.

Frequently asked questions

Iceland: is there a digital nomad visa?
No dedicated digital nomad visa; most people use a standard residence permit instead.
Iceland: when do you become a tax resident?
Staying longer than 183 days in total in any 12-month period makes you tax resident with unlimited liability on worldwide income, and ordinary absences such as holidays still count towards that total (Income Tax Act no. 90/2003, art. 1). Being domiciled in Iceland makes you resident whatever the day count, and non-residents are taxed only on Icelandic-source income. If you leave and cancel your Icelandic domicile, Iceland can still tax your worldwide income for three years from the New Year following your departure unless you show you are taxed as a resident somewhere else.
Iceland: what is the cost of living?
The cost of living is high and the local currency is the ISK. Treat any figures as estimates.
Iceland: do you need health insurance?
Public healthcare needs a registered legal domicile, and cover normally starts only three months after Registers Iceland records that domicile, so you need private insurance in the meantime. People arriving from the EEA, the UK, Switzerland, the Nordics, Greenland or the Faroe Islands who were insured there can be covered sooner. A short-term residence permit does not allow you to register legal domicile at all, so it never leads to public cover.
Iceland: can you drive on a foreign licence?
EEA/EU licences are valid; many non-EEA visitors can drive on their home licence short-term, but an International Driving Permit is a useful backup.

Terms worth knowing

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Last verified: 2026-09-05

Voymo gives general information to help you organise your move. It is not legal, tax, or immigration advice, always confirm with an official source or a qualified professional before you act.

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