According to the Article 40 of Icelandic Rent Act No. 36/1994, landlords must keep rental deposits in the highest available interest savings account. However, many landlords fail to do this, resulting in tenants losing out on interest earnings; furthermore the law does not specify how to calculate the interest owed. This tool provides a simple way to calculate the approximate interest owed.
Rate calculation method
According to Icelandic rental law, deposits must be stored in the highest interest savings account available. This calculator assumes the highest available rate is the Central Bank's key interest rate minus 0.60%, which reflects the interest offered on Auður bank's savings account, generally the highest one on the market.
Enter deposit details to calculate interest
According to Icelandic law, the interest is calculated based on the Central Bank of Iceland's key interest rate minus a margin (0.60%), which is usually the rate of the best interest on the market. The calculator applies the appropriate rate for each time period, accounting for any rate changes during your rental period.
Yes, capital gains tax (Fjármagnstekjuskattur) of 22% is automatically applied to the interest earned on your deposit. This calculator shows both gross interest and net interest after tax. Whether the tax burden of this interest is on the tenant or the landlord is a matter of legal interpretation.
According to Article 40 of the Icelandic Rent Act (Húsaleigulög nr. 36/1994), landlords are legally required to keep deposits in separate accounts with the highest available interest rate. If your landlord hasn't paid the correct interest, you may have grounds for a claim. The landlord has four weeks from the end of the rental period to pay back the deposit. If they fail to do so, you can take legal action to recover the amount, and claim "dráttarvextir" (default interest) from the date the interest was due.
The Central Bank of Iceland periodically reviews and adjusts its key interest rate. These changes directly affect the interest rate that should be applied to your deposit. This calculator automatically accounts for all rate changes during your rental period. The tool does not provide real-time updates, so it is advisable to check the Central Bank's website for the latest rates.