Property tax discount

Article 1.

Low-income elderly and disabled pensioners who are resident in Hafnarfjörður are granted a discount on property tax in accordance with the annual decision of the municipal council and these regulations, pursuant to the authority in section 4. paragraph of Article 5 of the Act No. 4/1995 on the income bases of municipalities.

2. group.

Eligible for the discount are those who are registered owners of a property in Hafnarfjörður, have their legal residence there and may be entitled to interest allowances in respect of it under Article 68(b) of the Income Tax Act No. 90/2003. Applicants must also

• be 67 years of age or older in the year,
• have been assessed as 75% disabled by 1 January 2025. Those assessed as 75% disabled in the assessment year are entitled to a pro-rata reduction from when the disability assessment took effect,
• do not have rental income from the relevant property,
• have no dependent person(s) other than a spouse living in the household.

The discount only applies to the dwelling in which the person actually resides.

3. group.

Married couples and those in a registered partnership receive the full discount, even if only one party meets the conditions of Article 2. If there is more than one owner of a property who does not meet the conditions of paragraph 1, a discount is granted to those who meet the conditions of Article 2, in proportion to their share of ownership.

Upon the dissolution of a marriage or cohabitation, the parties to the case are entitled to one of the following from the time the divorce or separation is registered.,

• to enjoy an unchanged discount throughout the assessment year, should they so wish,
• to be treated as individuals from that time onwards if they so wish, provided they can adequately demonstrate their separate income, see Article 4.

4. group.

The deduction is means-tested. The deduction is a pro-rata amount based on the previous year's income as declared on the tax return. For the calculation of the discount at the start of 2026, the 2024 tax return is used, but the discount is then reviewed once the 2025 tax return is available. If the review results in a change to the allowance, it will be adjusted for the remaining payments for that year. No recalculation is made for payments up to that point. Income includes both salary and wages (box 2.7 on the tax return) and capital income (box 3.10 on the tax return). The calculation is based on the combined income of married couples and those in a registered partnership.

The income thresholds for the 2026 discount are as follows (based on 2024 income until the 2025 tax return is available):

5. group.

Where there has been a significant change in an applicant's circumstances, it is permissible to depart from clause 2 of these rules regarding residence in a flat and the reference to income limits for the previous year, and in the case of a spouse's death.

This particularly refers to specific cases, such as:

• when a spouse has died during the year and income has decreased significantly,
• in the case of sudden disability which has a significant adverse effect on income.

6. group.

These rules shall be updated and approved annually with updated income thresholds.

Adopted by the Hafnarfjörður Town Council on 3 December 2025.