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Iceland Capital Gains Tax Guide 2026

Iceland imposes capital gains tax (CGT) at a flat rate of 22% on most asset disposals, with significant exemptions for principal residences and long-term share holdings.

Standard CGT Rate

22% on capital gains from the sale of shares, bonds, real estate (non-primary), and other capital assets.

Principal Residence Exemption

Gains on the sale of your primary residence are 0%. There is no limit on the exclusion amount. The property must have been your main home for at least one year prior to sale.

Shares — Holding Period Rules

• Held less than 3 years: gains taxed at 22%
• Held more than 3 years: 0% if proceeds are reinvested in qualifying shares within the same year. If not reinvested, gains are taxable at 22%.

Capital gains derived from dividends of the same company are treated as dividend income rather than capital gains, simplifying the tax treatment.

Loss Offset

Capital losses may be offset against capital gains in the same year. Unused losses can be carried forward for up to 3 years. Losses on shares held less than 3 years may only offset gains on similar assets.

Bonds and Other Securities

Gains on bonds and debt securities are taxed at 22%. Indexation adjustments may apply for inflation-indexed bonds.

Foreign Assets

Icelandic residents are taxed on worldwide capital gains. Foreign tax credits are available under Iceland's network of over 45 double tax treaties to avoid double taxation.