First buy


The Icelandic Act on first home buyer assistance was passed on the 1st of July, 2017. The Act authorises the tax free payment of a private pension towards buying a home or paying towards a mortgage. Anyone can utilise this option for a period of ten years. The Act is intended to help first home buyers.

Do you want to apply?

The RSK webpage provides all the necessary information

Application for disposition of private pension savings

More information

  • The maximum allowance per person is ISK 500,000 over a 12-month period

  • The maximum allowance for a couple is ISK 1,000,000 over a 12-month period

  • You can use the private pension savings accumulated since the 30th of June 2014

  • The maximum allowance is 2% from the employer and 4% of your own premium

  • You can only use your private pension towards a property if you have not purchased or owned a property previously

  • The loan must be subject to interest allowance and must be used as a mortgage

  • You must be registered for at least 30% of the property

Three options


You have three options to choose from. You can also mix and match.

1. Savings option

- Saving for a pay-out

2. Principal option

- Regular payments towards the principle loan amount

3. Mixed option

- Allocation of a premium towards a non-indexed loan and as payment towards the principal loan amount

- In this case, the premium for the first 12 months would be used in full to pay regular instalments and interest on a non-indexed mortgage

- This ratio decreases by 10% per year, whereas the ratio of payment towards the principal loan amount increases.

These options are available to anyone buying their first property and can be used for a ten-year period.

Anyone buying their first property can use their private pension savings, accumulated over 5 years, as a down payment and as a regular mortgage payment for the next 5 years. The total allowable period is 10 years.

Are you planing to buy a property after a year or more?


Most people who plan to use their private pension towards a new home prefer less fluctuations. The Home Plan option may be suitable if you intend to buy a property after a year or more.

Do you plan on buying a property in the near future?


A non-indexed pension account may be suitable if the purchase is likely to take place within a year.