Where to live in Iceland
We track 3 cities in Iceland: Akureyri, Reykjanesbær and Reykjavík. Average temperatures run from 4°C to 5°C. We estimate a couple needs €3,742 to €4,180 a month to live centrally. Iceland sits in our high tax tier. For citizens from outside the EU, EEA and Switzerland, long-term residency is hard to obtain.
12 questions, about 4 minutes, no account needed. Taking the quiz is free, and so is seeing your #1 city. Full results for both of you are a one-time US$12 (€12 in Europe).
- Tax tier
- High
- High personal income tax
- Languages
- Icelandic, English
- English everywhere
- Safety
- 90/100
- country-level
- Healthcare
- 82/100
- country-level
- Internet
- ~230 Mbps
- median fixed broadband
The 3 cities we track
| City | Size | Setting | Avg temp | Rain a year | Est. cost a month |
|---|---|---|---|---|---|
| Akureyri | smaller | coastal | 4°C | 583 mm | €3,742 |
| Reykjanesbær | smaller | coastal | 5°C | 957 mm | €3,747 |
| Reykjavík | smaller | coastal | 5°C | 961 mm | €4,180 |
Source: City size from GeoNames, temperature from the Open-Meteo archive (2019 to 2023 averages), rainfall from TerraClimate (1991 to 2020 normals), coast distance from Natural Earth. Cost is our model estimate for a couple living centrally.
Taxes
Iceland sits in our high tax tier: high personal income tax. The tier applies to every city here, and couples who cap tax below it will not see these cities in their results.
Source: OurNextCity tax tiers, assigned by hand from each country's top marginal personal income tax rate and overall tax reputation, with no fixed rate cut-offs. Coarse by design; not tax advice.
Residency and visas
Hard to obtain, for people from outside the EU, EEA and Switzerland. Long-term residency for non-EEA nationals runs almost entirely through employer-sponsored skilled-work permits (qualified experts, athletes, labour-shortage roles) or family reunification, with no passive-income, retirement, or investor route and a remote-worker long-stay visa that is capped at six months and grants no residency.
Citizens of the EU, EEA and Switzerland have freedom-of-movement or simplified residency rights here.
For short visits, 93 of 198 passports can enter visa-free and 105 need a visa in advance.
Source: OurNextCity residency dataset, hand-reviewed approximations researched against published immigration rules. Not legal advice: check the official source before you apply. Short-stay entry from the passport-index dataset (ilyankou, MIT).