Income tax on rent, worked example, in Iceland
October 17, 2018
|Non-resident couple´s rental income1|
|Monthly Rental Income2||1,500||6,000||12,000|
|Annual Rental Income||18,000||72,000||144,000|
|= Taxable Income||50%||9,000||36,000||72,000|
|Annual Income Tax Due||1,980||7,920||15,840|
|Tax Due as % of Gross Income||11.00%||11.00%||11.00%|
1 The property is jointly owned by husband and wife.
2 Exchange rate used: 1.00 EUR = 115.00 ISK
3 For long-term lease of residential properties, only 50% of gross income is taxable.
4 Rental income earned by nonresident individuals is taxed at a flat rate of 22%.