Introduction

At OH-Stay.com, we have created this guide to help hosts understand their responsibilities and provide a clear overview of the legal, regulatory, and practical considerations for hosting in Iceland. Hosts are required to comply with our Hosting Standards and all applicable laws and regulations. This guide is for informational purposes only and does not constitute legal or tax advice. Hosts should verify all requirements independently. Responsibility for compliance rests solely with the host.

Table of Contents

• Health and Cleanliness

• National Taxes

• Regulations and Permissions

• Safety

• Courtesy

• Insurance

• Other Hosting Information

Health and Cleanliness

Hosts should maintain high hygiene standards, including regular cleaning of bathrooms, kitchens, and common areas, and disinfecting surfaces between guest stays. More detailed guidance can be found in OH-Stay.com's Responsible Hosting Guide.

National Taxes

Tax obligations vary by host circumstances. Generally, income earned as a host is taxable and may be subject to income tax, VAT, or lodging tax.

Income Tax
Changes to Act No 90/2003 classify rental income from residential properties as a business activity unless exemptions under Article 58a apply, such as:

• Renting residential properties under the Rent Act (No. 36/1994) with no more than two properties.

• Deducting rent paid elsewhere from rental income (“rent for rent” exemption).

• Home hosting in a registered property, up to ISK 2,000,000 per calendar year.

Income outside these exemptions is considered business income and is subject to general taxation. Operational costs may be deducted.

VAT
Hosts earning over ISK 2,000,000 annually must register for VAT and charge 11% on rentals of up to 30 days. Rentals longer than one month are exempt. VAT records and returns must comply with Acts No 145/1994 and 50/1988.

Lodging Tax
Lodging tax applies to all VAT-taxable accommodation services for rentals up to 24 hours.

Real Estate Tax
Home hosting generally does not affect municipal property classification. Hosts should confirm applicable local rates with their municipality.

Free Tax Guide
OH-Stay.com partners with independent accounting firms to provide a free tax guide covering Icelandic tax requirements (available in English and Icelandic).

Regulations and Permissions

Ensure hosting is permitted under property agreements, laws, and community rules. Legal consultation is recommended.

Home Hosting Regulations
Under Act No 85/2007, home hosting allows registered owners to rent their residence for up to 90 days per year, with a maximum of ISK 2,000,000 in income. Properties with more than five rooms or capacity for over 10 people fall outside home hosting rules. Hosts must register with the District Commissioner and obtain a national registration number. Registration requires confirming property compliance with fire safety, health, and hygiene regulations.

General Accommodation Services
Properties exceeding home hosting limits are classified as general accommodation and require an operating license. Categories include:

• Accommodation without catering

• Accommodation with catering (no alcohol)

• Accommodation with catering and alcohol service

Licenses are obtained from the District Commissioner in the applicable district.

Contractual Agreements and Permits
Check leases, building rules, and community restrictions. Addenda may clarify subletting responsibilities. Mortgage holders should confirm subletting permissions. Residents in subsidized housing must consult their housing authority.

Housemates
For shared properties, formal agreements help clarify hosting frequency, guest etiquette, and revenue sharing.

Misuse
OH-Stay.com takes action if misuse is reported, with guidance for local authorities.

Safety

Hosts should prioritize guest safety:

• Emergency Contacts: Provide local emergency numbers, nearest hospital, your contact, and a backup contact.

• Medical Supplies: Maintain a first aid kit and inform guests of its location.

• Fire Safety: Comply with gas regulations, maintain carbon monoxide detectors, provide and maintain fire extinguishers, and mark fire escape routes.

• Hazard Prevention: Remove or clearly mark trip hazards, exposed wires, unsafe stairs, and dangerous objects.

• Child Safety: Indicate if the property is unsuitable for children or infants.

• Climate Control: Ensure proper ventilation and functioning of heating and air conditioning.

• Occupancy Limits: Follow local guidelines.

Courtesy

Communicate rules and customs to guests:

• Building Rules: Share regulations for common spaces.

• House Rules: Include expectations in your listing.

• Neighbors and Noise: Notify neighbors, set quiet hours, and restrict parties or unregistered guests.

• Parking: Provide clear guidance on parking restrictions.

• Pets: Confirm building rules and provide guidance for pet care.

• Privacy: Respect guest privacy and comply with local surveillance laws.

• Smoking: Designate areas or prohibit smoking.

Insurance

Hosts should review insurance policies to ensure adequate liability and property coverage. For Hosts provides basic damage and liability coverage but does not replace homeowner or renter insurance. Review policy terms carefully.

Important: Hosts are solely responsible for their conduct and compliance. OH-Stay.com does not control individual host behaviour and is not liable for their actions. Non-compliance may result in suspension or removal. OH-Stay.com is not responsible for the accuracy of information on third-party sites linked in this resource.