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Living in Iceland

A practical guide to the way of life in Iceland

Settling down in Iceland, a nation with a particularly high standard of living, can be an amazing expat experience, despite the high prices. Read the InterNations GO! guide to Iceland to learn about finding accommodation, healthcare, education, and safety.

Need to move abroad? Organizing an international relocation is not something you should do on your own. As expats, we understand what you need, and offer the the essential services to help you move and live abroad easily. Contact us today to jump start your move, and begin the preparations with our free relocation checklist.

Life in Iceland

At A Glance:

  • Iceland has a very different system for creating surnames — instead of a family name, each surname derives from the father’s name.
  • Icelanders tend to buy property rather than renting, meaning that the rental market is rather small and expensive.
  • Iceland only has public healthcare, funded through taxation, to which all citizens and registered residents are entitled.
  • The Icelandic education system is of a particularly high standard and is compulsory between the ages of 6 and 16.

The People and Society

Before developments in modern transportation allowed European countries to become better connected, Iceland had been rather isolated. Consequently, life in Iceland lets you experience a whole new level of solitude. The small island is the most sparsely populated country in Europe, with less than three inhabitants for every square kilometer.

However, Iceland is a modern nation which continues to occupy the top ranks of the UN Human Development Index. Interestingly, despite the isolation, Iceland has consistently ranked in the top 3 of the World Happiness Report (a study organized by the UN). Until the financial crisis in 2008, which continues to have some effect on life in Iceland, the economy was among the most productive in the world. Even though the economy has suffered in recent years, Iceland’s road to recovery has been unique and rather impressive, with the government deciding to allow the banks to fail and start over.

Iceland: A Unique Naming System

Icelandic names follow a specific pattern. While in Iceland, you may read or hear the suffix –son (son) or –dottir (daughter) attached to a last name. Last names follow an old tradition of being patronymic: they’re derived from the father’s name, to which one of the two suffixes is added. For example, if a man named Erikur has a son called Sven, his name would be Sven Eriksson (the son of Erikur).

However, as Icelanders do not have family names in the same way as the rest of the world, they would never be referred to by their last name only — even the President would only be referred to by his full name.

Regional Divisions in Iceland

Historically, people in Iceland settled in one of the four “farthings” (landsfjórðungar) which received their names from the directions on a compass. Farthings were administrative divisions which acted as a local government, organizing regional assemblies and courts. Later, municipalities, counties, and independent cities replaced the farthings.

In the 1990s, the traditional division of the farthings as well as the municipalities lost significance. Instead, one local government was implemented which is in charge of different aspects of life. Whenever a municipal division is required, mostly for statistical purposes, Icelanders fall back on the eight administrative regions:

  • Austurland
  • Hofudhborgarsvaedhi
  • Nordhurland Eystra
  • Nordhurland Vestra
  • Sudhurland
  • Sudhurnes
  • Vestfirdhir
  • Vesturland

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Accommodation in Iceland

As an expat, it is usually more practical (and less stressful) to find a place to live before making the move abroad, with many deciding to find a place during a shorter preliminary visit to the country. However, not every expat has the time or money to travel to Iceland solely to search for an apartment. Instead, a guesthouse or Airbnb may be a convenient short-term solution until you find your ideal place.

The Apartment Search in Iceland

Most Icelanders prefer buying a place rather than renting, and about 80% of property in Iceland is privately owned. As a result, the rental market is rather small, making the apartment search even more difficult. Rent is also considerably higher in Reykjavik than in smaller towns or villages.

There are different ways to find an apartment. It is not uncommon to post an advertisement in a local newspaper. However, these papers are published in Icelandic, so it could be useful to connect with your expat network or perhaps speak to Icelandic co-workers to see if they can help.

There are also a few websites which offer up-to-date housing listings: Visir and mbl.is are the websites of two Icelandic newspapers with extensive classifieds sections. Although both websites are in Icelandic, you can look for housing by searching for “Húsnæði í boði”. The same applies to online rental agencies, such as Leiga.is, which conveniently offers an English version of its website.

You may also wish to use a rental agency, like Leigulistinn. You pay a monthly fee to receive a list of apartments and houses which are currently for rent. Make sure to check with them regularly to find out if new rentals have become available.


Upon arrival, one of the first things you need to do is register as a resident of Iceland. Anybody who plans on living and working in Iceland for more than three months is required to do this. Make sure to register within seven days of your arrival at the office of your municipal authority, or Registers Iceland in Reykjavik. For the purpose of registering as a resident, your residence may be a guesthouse or hotel.  The registration form may be submitted via mail, email, or in person at the office.

If you plan on living and working in Iceland for more than six months, you need to prove that you have a legal domicile in Iceland. Your legal domicile or fixed residence is the place where you spend most of your free time, where you sleep, and where you keep your belongings. It must have a fixed address and cannot be a guesthouse or hotel. In order to register your house or apartment as your legal domicile, you have to have a personal ID number and, if you are not an EU/EEA-national, a residence permit. Contact Registers Iceland for more information.

Rent Subsidies and Cost of Living

The cost of living in Iceland is exceptionally high. A small apartment in Reykjavik may cost you at least 175,000 ISK (approximately 1,600 USD) a month. Although rents are not exactly low, items like food, clothing, and luxury goods like alcohol are particularly expensive. Even if you manage to negotiate a generous salary with your future employer, there is a chance you may find yourself needing financial support at some point.

If you have signed a lease for at least six months and are at least 18 years of age, you may apply for rent subsidies and receive financial compensation. Each application is valid for one year and must then be renewed. However, you can only receive compensation for residential housing. Visit the Social Services Office (þjónustumiðstöð) in your municipality for more information, or read further information about Housing benefits here.

Healthcare, Education and Safety in Iceland

Icelanders are among the healthiest people in the world, reflected in the low infant mortality rate and high life expectancy. It is not only the low pollution that’s to thank for this but also the well-organized healthcare system. In Iceland, the number of medical staff per person is higher than anywhere else in the world.

Public Healthcare

Iceland does not have a private healthcare sector, instead healthcare services are controlled and funded by the state. Citizens and residents of Iceland contribute through taxes, and everybody is entitled to healthcare coverage. In order to automatically receive coverage, expats need to register and have lived in Iceland for at least six months. You cannot opt out of the public healthcare system.

With state health insurance, you may receive hospital treatment, medical prescriptions, emergency care, dental treatment, maternity care, and more. This also includes sickness benefits in case of an illness or injury that leaves you temporarily unable to work. For medication to treat serious illnesses, around 75% of the cost will be reimbursed, while antibiotics and painkillers must be paid for by the patient.

Iceland is divided into seven different healthcare districts which each run their own healthcare centers called heilsugaeslustod. Every citizen and resident has to register with a GP in their area. While it may be easy to find a doctor in towns and cities, it may be harder for expats in rural areas. Still, in each area there is usually a doctor who is on call 24 hours a day, and you can also visit the emergency ward (Slysadeild) of a hospital if needed.


Ever since the end of the 18th century, Iceland has had a universal literacy rate and a high quality of education. Today, school is mandatory for children aged 6 to 16. Education in Iceland is divided into four different stages, of which only the first two are compulsory. This includes primary and lower secondary education and is open to all children with no tuition fees.

Although upper secondary education is not compulsory, there are still no tuition fees for these schools. Students who attend upper secondary education are usually between the ages of 16 and 20 and earn a degree which allows them to attend a university. There are very few private and international schools in Iceland, though you will find the International School of Iceland in Reykjavik. Menntaskólinn vid Hamrahlíd, on the other hand, is an Icelandic school which offers IB studies.

Crime and Safety

The crime rate in Iceland is very low, with the majority of incidents involving theft and pick pocketing. These mostly occur in Reykjavik near major tourist attractions where visitors are perceived as easy targets. Violent crimes, on the other hand, are quite rare. Outside of Reykjavik, emergency services and police are understaffed but supported by civilian volunteers. Iceland’s laws concerning drink driving, as well as possessing, using, or trafficking illegal drugs are very strict; those breaking the law face not only hefty fines but also long jail sentences.

Do you want to relocate? If you have never moved abroad, the process will be overwhelming, and if you have, you know the burden that lies ahead. Whatever stage you are at, InterNations GO! can help you with a complete set of relocation services, such as home finding, school search, visa solutions, and even pet relocation. Our expert expat team is ready to get your relocation going, so why not jump-start your move abroad and contact us today? Best to start early!

Updated on: July 24, 2019
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