Iceland capital gains tax calculator

Capital gains are capital income, taxed at a flat 22% for an individual outside business. The rate has been 22% since 1 January 2018 and is unchanged across every year this calculator covers. No separate progressive scale applies to capital gains, so the tax does not depend on your salary.

It is a single combined annual allowance of ISK 300,000 per person (ISK 600,000 between spouses, each having their own). It covers interest, dividends and capital gains on shares of companies listed on a regulated securities market or a market for financial instruments, and the law uses it first against interest, then dividends, then listed-share gains. It is not a threshold on proceeds, it is not a wealth-tax figure, and it does not reach unlisted shares, crypto or property. Appreciation of fund unit certificates is interest-category income (8. gr.) and shares the allowance through the interest limb, although the classification of every ETF wrapper is not settled.

Yes, where you owned the property for two full years or longer. The test is inclusive: selling on the second anniversary qualifies and selling the day before does not. Your own home has no size limit (the 600 m³ cap was waived for a seller's own use from 1 January 2016); another residential property is exempt only within 600 m³, or 1,200 m³ for spouses, and the gain attributable to the excess is always taxable.

Iceland taxes the capital gains of an individual outside business (utan atvinnurekstrar) as capital income at a flat 22% (log nr. 90/2003 um tekjuskatt, C-lidur 7. gr., charged under 66. gr. 3. mgr.). Skatturinn states the capital income tax rate has been 22% since 1 January 2018 and the annual key-rates page repeats 22% for income year 2026; the rate is unchanged across every year this record set covers. Capital income tax is withheld at source on interest and dividends and is the final assessment on capital income. Sources: https://www.skatturinn.is/english/individuals/key-rates-and-amounts/2026/ and https://www.skatturinn.is/einstaklingar/fjarmagnstekjur/soluhagnadur/ and https://www.althingi.is/lagas/nuna/2003090.html

Annual allowance (fritekjumark): from assessment 2021 (income year 2020) no capital income tax is computed on the one hand on interest income and on the other hand on income from shareholdings in the form of dividends and capital gains in companies listed on a regulated securities market or a market for financial instruments (skipulegur verdbrefamarkadur eða markadstorg fjarmalagerninga), in total up to ISK 300,000 per year per person; spouses (hjon) have ISK 600,000 between them (Skatturinn helstu tolur: "Fritekjumark er 300.000 kr. samtals a manni, 600.000 kr. fyrir hjon"). The allowance is used first against interest, then dividends and finally capital gains on listed shares (66. gr. 3. mgr. log nr. 90/2003, inserted by log nr. 142/2020 with effect from the 2021 assessment). It is an allowance against the income (the gain), never a threshold on proceeds. Fund units share it: 8. gr. log nr. 90/2003 treats appreciation of a fund unit certificate (hlutdeildarskírteini) as interest-category income, so a fund-unit gain is sheltered with the interest limb, after the year's other interest and dividends and before listed-share gains (Skatturinn binding opinion no. 650); the precise classification of every ETF wrapper remains unresolved. The allowance does not reach unlisted shares, crypto, real property or other assets. Sources: https://www.skatturinn.is/nuna-helstutolur-ein and https://www.skatturinn.is/einstaklingar/fjarmagnstekjur/ardur/ and https://www.althingi.is/lagas/nuna/2003090.html and https://www.althingi.is/lagas/149a/2003090.html and https://www.skatturinn.is/fagadilar/bindandi-alit/nr/650 and https://www.skatturinn.is/einstaklingar/fjarmagnstekjur/soluhagnadur/

Shares: a gain on the sale of shares is fully taxable in the year of sale whatever the holding period (18. gr. log nr. 90/2003). The cost basis of each share is the average purchase price of all shares of the same kind (somu tegundar) held by the same owner (18. gr. 2. mgr.), which is why this calculator matches share parcels at average cost rather than first in, first out. Shares bought before 1997 carry the indexed or equalisation-value cost rules of 18. gr., which this calculator does not compute. Source: https://www.skatturinn.is/einstaklingar/fjarmagnstekjur/soluhagnadur/

Losses: a loss on the sale of shares may be deducted from the gain on the sale of other shares in the same year, but a loss from a bankruptcy may not be deducted from gains on other shares (Skatturinn, soluhagnadur). No carryforward of an individual's capital losses exists in Icelandic law, so an unused loss is lost. Crypto: a loss may be deducted only from a gain on the sale of the same kind of crypto asset in the same year, never from a gain on another kind, and a loss from lost or stolen keys is not deductible. Real property: a loss is generally not deductible but may be deducted from gains on similar property in the same year; this calculator nets property losses only within its single property card, on the assumption the properties are similar, and a loss on a dissimilar property may not net. Fund units: the sources located (8. gr.; Skatturinn binding opinion no. 650) classify fund-unit appreciation as interest-category income but state no rule on whether a realised fund-unit loss can be offset, so the calculator's no-relief treatment of a fund loss is an unverified model choice, not a sourced rule. Business operating losses follow the business rules and are outside this record. Source: https://www.skatturinn.is/einstaklingar/fjarmagnstekjur/soluhagnadur/ and https://www.skatturinn.is/english/individuals/taxable-income/ and https://www.skatturinn.is/einstaklingar/skattskylda/rafmynt/ and https://www.althingi.is/lagas/149a/2003090.html and https://www.skatturinn.is/fagadilar/bindandi-alit/nr/650

Private residence: the gain is fully taxable where the seller owned the property for less than two years and is not taxable where the seller owned it for two years or longer (17. gr. 1. mgr. log nr. 90/2003). The two-year test counts a full two years of ownership, so a sale on the second anniversary of the acquisition is exempt and a sale one day earlier is taxable. The exemption applies only to the extent the seller's total residential volume at the sale date does not exceed 600 m3, or 1,200 m3 for spouses (hjon); the gain attributable to volume above the limit is always taxable. From 1 January 2016 the size limit does not apply where the property was for the seller's own use (log nr. 124/2015, 1. gr., amending 17. gr. 1. mgr.). Source: https://www.skatturinn.is/einstaklingar/fjarmagnstekjur/soluhagnadur/ and https://www.althingi.is/lagas/nuna/2003090.html

Recreational housing (fristundahusnædi) in the ownership of an individual is exempt from income year 2020 on the same terms where the combined volume of the property and the owner's residential property does not exceed 600 m3 (1,200 m3 for spouses), the property has been used by its owners and not let for consideration, and ownership lasted at least seven years (17. gr. final paragraph, added by log nr. 142/2020, applying from the 2021 assessment). Source: https://www.skatturinn.is/einstaklingar/fjarmagnstekjur/soluhagnadur/

Real property other than a private residence, including land, plots, commercial property and a summer house that does not meet the recreational conditions, is fully taxable whatever the holding period (15. gr. log nr. 90/2003). Instead of the cost basis the seller may use half the sale price (helming soluverds) and, where the property was owned at the end of 1978, the 1979 assessed value indexed forward; the half-price election is modelled here as a per-sale toggle. A seller who buys or starts building another residence may also defer the gain by two year-ends (17. gr. 3. mgr.); this calculator does not compute the deferral. Source: https://www.skatturinn.is/einstaklingar/fjarmagnstekjur/soluhagnadur/ and https://www.althingi.is/lagas/nuna/2003090.html

Crypto: Iceland has no dedicated crypto statute. Skatturinn states that no specific statutory provision on the taxation of cryptocurrency such as Bitcoin and Ethereum exists and that the general provisions apply: for an individual outside business a crypto disposal is a sale of movable property under 16. gr., a taxable gain arises where the value handed over exceeds the cost basis (purchase price plus handling fees, with sale handling fees deducted from the sale price), the gain is fully taxable in the year of sale whatever the holding period, and a swap of one crypto asset for another is itself a disposal. Crypto does not qualify for the ISK 300,000 allowance, which covers interest (including fund-unit appreciation), dividends and listed-share gains. Mining and dealing may be business income, and crypto held at year-end is reported as an asset. Source: https://www.skatturinn.is/einstaklingar/skattskylda/rafmynt/

Private valuables: a gain of an individual on the sale of movable property not used in business is outside taxable income unless the asset was acquired for resale at a profit (16. gr. 2. mgr. log nr. 90/2003), so cars, jewellery and similar private valuables carry no capital gains tax. Assets dealt with as part of a business or profit-making activity are taxed under the business rules instead. Source: https://www.skatturinn.is/einstaklingar/fjarmagnstekjur/soluhagnadur/

Scope: this record covers an individual resident in Iceland outside business. Partnerships and companies, business income and its ten-year operating-loss carryforward, the sale of fishing quotas, the pre-1997 share cost rules and the residence roll-over are outside it.