How Much Does It Cost to Move to Iceland

By Editor / July 06, 2025

Relocating to Iceland can feel like a dream—glaciers, clean air, safe cities—but dreams still come with price tags. The cost to move to Iceland will challenge most budgets, especially for Americans unfamiliar with Icelandic prices, taxes, and systems. Still, thousands of expats make it work every year, and not just the ultra-rich. It all depends on what you bring, how you live, and how well you prepare. Hiring international movers helps reduce logistical headaches, but you still need to plan for everyday expenses. We’ll walk you through it—from housing to health insurance—so you know exactly what you’re stepping into.

What Does Housing Really Cost in Iceland?

Housing will eat the biggest chunk of your budget, especially in Reykjavík. Moving to Iceland means entering a tight and costly rental market. A one-bedroom apartment in Reykjavík rents for $1,600 to $2,200 per month, depending on the neighborhood and amenities. In smaller towns like Hveragerði or Ísafjörður, you might find prices closer to $1,000 to $1,300, but inventory is low. There’s no MLS system, so rentals are scattered across Facebook, Leiga.is, and word-of-mouth. Most landlords expect the first month’s rent, last month, and a deposit equal to one month’s rent. That’s easily $4,500 upfront for a modest apartment. If you’re thinking about buying, prepare for even higher numbers.

A 3-bedroom apartment in Reykjavík costs $400,000 to $650,000, depending on the area and whether it’s been updated. Foreigners can buy property with permission, but getting approved and finding a place that meets modern standards is slow and expensive. Mortgage interest rates run 4% to 6%, and down payments are usually 20%. Temporary rentals are scarce, so don’t expect to “wing it” while you search. If you’re arriving in winter, competition for apartments drops slightly—but so does available inventory, as many leases start in the spring.

Housing Costs at a Glance

Icelandic housing prices vary wildly depending on the city and property type. Here’s what to expect when renting or buying.

• $1,600–$2,200/month for 1-bedroom in Reykjavík
• $1,000–$1,300/month in smaller towns
• $4,500 upfront (first + last month + deposit)
• $400,000–$650,000 for 3-bedroom home
• 4%–6% mortgage interest rates
• 20% minimum down payment

How Much Will You Spend on Groceries?

Grocery costs shock almost every American who moves here. A gallon of milk costs about $6.50. Eggs run $7 to $9 per dozen. Bread is around $4 to $5. Chicken breast costs about $11 per pound, while cheese runs about $12 to $15 per pound. Produce is where the pain really sets in. A pound of apples costs $3.50, bananas $2.80, and a small pack of strawberries can hit $9. Shopping strategy is everything. Pack food for moving day to avoid overpriced snacks while you learn the ropes. Bónus is the budget grocery chain locals love. Krónan is cleaner and has more variety, but costs more.

Hagkaup offers specialty items and imports, but it’s the most expensive of the three. Costco, located in Garðabær, saves money for families who can buy in bulk, but the membership fee is $60 and selection rotates. Imported goods from outside Europe carry tariffs, so American cereals, peanut butter, and energy bars cost double. Meal prepping and shopping midweek help avoid weekend inflation. Most Icelanders eat simply—think fish, rye bread, potatoes, and yogurt—and you’ll save a lot if you adapt.

Grocery Prices You Should Expect

Basic groceries come at a premium in Iceland, especially imported goods. Here’s what you’ll likely pay.

• $6.50 for a gallon of milk
• $7–$9 per dozen eggs
• $4–$5 per loaf of bread
• $11 per pound for chicken breast
• $12–$15 per pound for cheese
• $3.50/lb for apples
• $2.80/lb for bananas
• $9 for a small pack of strawberries
• $60 Costco membership

What Will You Pay for Utilities and Internet?

Utilities in Iceland cost less than you’d expect, but only if you live in a well-insulated home. Heating is geothermal and cheap, averaging $60 to $90 per month for a small apartment. Water is clean, cold, and usually included in rent or bundled into condo fees. Electricity runs $40 to $70 monthly for light use but jumps during winter. Older buildings lose heat fast, so your bill could double if the windows aren’t sealed tight. Internet is fast and stable. You’ll pay around $70 per month for a decent 200 Mbps connection, and setup can take 3 to 5 days. Cell plans start at $25 for basic data and go up to $50 for unlimited plans with roaming.

Prepaid SIMs are easy to find but offer less value. Moving to Europe from USA means adjusting to usage-based billing and slower customer service when things go wrong. Hot water sometimes smells like sulfur because it’s pumped directly from geothermal sources—that’s normal here. Trash removal varies by town and is often charged separately—$15 to $25 monthly. If you’re used to all-inclusive rent, those extras can sneak up on you.

Utility and Internet Costs Broken Down

Geothermal heating helps, but don’t underestimate winter energy needs. Here’s what you’ll spend.

• $60–$90/month for heating
• $40–$70/month for electricity
• $70/month for 200 Mbps internet
• $25–$50/month for cell phone plans
• $15–$25/month for trash pickup

How Much Does Getting Around Cost?

Most Icelanders drive, and it’s not cheap. Used cars hold their value unusually well due to import taxes and demand. A 2015 Subaru Forester can cost $20,000. New cars run $35,000 to $60,000 depending on size and fuel type. Electric vehicles are growing, but public chargers are limited outside of the capital. Gas costs about 345 ISK per liter—roughly $10 per gallon. Car insurance costs $80 to $130/month depending on age and location. Parking in Reykjavík ranges from free in some areas to $1.50/hour downtown.

Bus service in the city is solid and costs about $4 per ride or $55 for a monthly pass. There’s no train system, and rural towns often have no transit options. International household goods movers typically don’t recommend shipping a car unless it’s under five years old and meets European emission standards—you’ll face customs fees, registration, and delays.

Transportation Costs in Iceland

Cars are pricey, and gas is even worse. Here’s the breakdown for local transit and vehicle expenses.

• $20,000 for a 2015 Subaru Forester
• $35,000–$60,000 for a new car
• $10/gallon for gas (345 ISK/L)
• $80–$130/month for insurance
• $1.50/hour for parking in Reykjavík
• $4 per bus ride
• $55 for a monthly bus pass

What Will You Spend on Healthcare?

Healthcare in Iceland is high-quality but not free when you first arrive. New residents must wait six months after registering their legal address before gaining access to public healthcare. Until then, private insurance is required. Plans cost around $200 to $300 per month for adults, and slightly less for children. After registration, doctor visits cost $25 to $40. A visit to a specialist is about $75, and emergency room fees start at $120. Prescriptions are subsidized but still cost money—a typical antibiotic might cost $20.

Dental, vision, and mental health services aren’t fully covered, even after public access kicks in. You’ll need supplemental insurance if those matter to you. International movers in NYC often advise clients to complete medical and dental checkups before leaving the U.S.

What Healthcare Will Actually Cost You

You’ll pay out of pocket early on. Here’s what you’ll spend before and after registration.

• $200–$300/month for private insurance
• $25–$40 for general doctor visits
• $75 for specialist visits
• $120+ for emergency room visit
• $20 for antibiotics

How Expensive Is the Visa and Residency Process?

The paperwork isn’t cheap, and it’s not fast. A residence permit for Americans costs about $150. Children cost slightly less, around $90. But these are only the beginning. You’ll need official translations of birth certificates, marriage certificates, and tax records. Translation fees range from $40 to $70 per page. Apostilles and notarizations cost $25 to $50 per document, and some states charge even more. Application delays are common without perfect documentation.

Hiring a consultant to handle the process can cost $600 to $1,200, depending on how many family members are applying. International moving cost often doesn’t include any legal or visa support, so budget for that separately. Keep in mind that the UTL (Directorate of Immigration) often runs behind schedule, and appointments can stretch for hours with no nearby food options.

Visa and Residency Application Costs

The paperwork adds up quickly. Include these fees when calculating the cost to move to Iceland.

• $150 for residence permit (adults)
• $90 for residence permit (children)
• $40–$70 per translated page
• $25–$50 per apostille or notary
• $600–$1,200 for professional application help

What Will You Actually Bring Home After Taxes?

Iceland’s taxes look high on paper—and they are. The average employee pays about 36% of their gross income in combined state and municipal taxes. High earners pay up to 46%. These taxes are withheld automatically, so your take-home pay is lower than most Americans are used to. That said, the public services (healthcare, infrastructure, education) are strong. Most expats report monthly net salaries ranging from $2,800 to $4,000, depending on the field.

Tech workers earn more, while service jobs pay less. Freelancers pay their taxes quarterly and must register for VAT if their income exceeds a certain threshold. Container shipping costs are also taxed, and shipments over $70 can incur import fees even if they’re personal goods. If you’re arriving on a Friday, know that banks, offices, and many shops close early, and the first weekend without groceries or cash access can be brutal.

Income, Tax Rates, and Net Pay

Iceland’s tax system is steep but predictable. These are the numbers that affect your take-home income.

• 36% average income tax
• Up to 46% for high earners
• $2,800–$4,000/month net for most workers
• $4,500–$6,000/month for tech workers
• $70 shipping threshold before import tax
• $70/month for internet
• $10/gallon gas
• $25 trash removal

How Much Will Childcare and Schooling Cost?

Preschool in Iceland isn’t free for newcomers. Fees for private daycare run $400 to $600/month per child, depending on hours and age. After six months of residency, you can apply for subsidized care, which drops that cost by about 30% to 50%. Public school is free and excellent. It runs from age 6 to 16 and includes meals, activities, and transportation. Private schools, including international ones, cost $6,000 to $10,000/year per child. English-speaking programs are limited and competitive.

School lunches are subsidized but not free—about $2.50 per day. Supplies are minimal, but parents cover field trips and extracurriculars. International movers often help families with children time their move with the academic calendar, especially if they want to enroll in bilingual programs. Raising a family in Iceland is easier once you’re registered, but the first six months can be financially rough.

Education and Childcare Costs in Iceland

Raising children is doable, but the early months are expensive. Here’s the cost to move to Iceland when it comes to childcare.

• $400–$600/month for daycare
• $6,000–$10,000/year for private school
• $2.50/day for school lunches
• 30%–50% subsidy after 6 months of residency

What Will You Spend on Fun?

Iceland isn’t known for cheap entertainment. A basic dinner for two in Reykjavík costs $90 to $120, even at mid-range restaurants. A beer at a bar runs $10 to $13. Cocktails? $18 to $22. Movie tickets cost $15, and concerts start at $40. That said, Icelanders know how to enjoy life without spending much. Free geothermal swimming pools exist in nearly every town, and admission is $6 to $10. Hiking is free and stunning.

Libraries, museums, and cultural centers offer low-cost memberships. Snack prices in tourist areas are outrageous—$6 for a bottle of water, $8 for a sandwich. Locals picnic instead. The city offers free public festivals, live music events, and open-air movie nights in summer. You just need to dress warmly and embrace the weather.

The Price of Going Out

Social life can be expensive, especially downtown. Here’s the cost to move to Iceland when it comes to dining and fun.

• $90–$120 for dinner for two
• $10–$13 for a beer
• $18–$22 for cocktails
• $15 for a movie ticket
• $40+ for concerts
• $6–$10 for swimming pool entry
• $6 for bottled water
• $8 for a sandwich

Can You Earn Enough to Stay Afloat?

That depends on what you do. Tourism jobs pay $2,400 to $3,000/month net. Tech jobs pay $4,500 to $6,000. Healthcare workers earn $3,500 to $4,500. Remote workers must prove an income of around $7,000/month to qualify for long-term visas. Freelancers report mixed experiences—some thrive, others struggle with VAT, taxes, and high costs.

Inflation has been steady at 7%–9% annually since 2022, so real wages have dropped in many fields. International movers in NJ often tell clients that savings are essential during your first year. The cost to move to Iceland is manageable on a middle-class American salary—but only if you budget like a local and adapt quickly.

Salary Ranges and Financial Outlook

Inflation is rising, but earning enough is possible—if you land in the right field.

• $2,400–$3,000/month net for tourism jobs
• $4,500–$6,000/month net for tech jobs
• $3,500–$4,500/month for healthcare workers
• $7,000/month minimum for long-term digital nomad visas
• 7%–9% annual inflation since 2022

Is the Cost to Move to Iceland Manageable or Not?

The cost to move to Iceland is high, but it’s not unpredictable. You’re looking at $15,000 to $20,000 in total expenses for the first three months if you’re renting, shopping normally, and handling your paperwork without delays. That includes rent, deposits, food, healthcare, insurance, transit, and setup fees. Moving without a clear income stream, buffer savings, or local housing secured will put you under serious financial pressure. Make sure your visa is approved before you fly. Don’t rely on finding housing last minute. Avoid importing cars, and limit what you ship unless you’ve priced out container shipping thoroughly. Prepare your medical, financial, and legal documents early. Shop at local chains, cook at home, and avoid the tourist markup. Iceland rewards organized, self-sufficient people. If that’s you, the cost is worth every króna.