Iceland's Ministry of Finance and Economic Affairs is preparing legislation to maintain the public’s ability to direct supplementary pension savings into housing loans, with the permission set to run for a combined ten years. The proposal follows plans outlined in the government’s first housing package released in October 2025 and would move away from the recent practice of renewing the permission one year at a time. The bill is expected to be submitted to the Icelandic Parliament (Althingi) in the coming months after a consultation process, and the permission is intended to apply retroactively from the start of 2026. Existing rules allowing tax-free use of supplementary pension savings for the purchase or construction of a first home will remain unchanged.
Ministry of Finance and Economic Affairs (Iceland) 2026-01-06
Iceland's Ministry of Finance and Economic Affairs drafts bill to extend use of supplementary pension savings for housing loan repayments to ten years
Iceland's Ministry of Finance and Economic Affairs is drafting legislation to extend the public's ability to use supplementary pension savings for housing loans for ten years, moving away from annual renewals. The bill, expected to be submitted to the Icelandic Parliament after consultation, will apply retroactively from early 2026, while existing tax-free provisions for first home purchases remain unchanged.