Reykjavik: what to see and whether to move there

What the city lives on and who it suits

Reykjavik is the capital of Iceland, with about 140,000 people in the city itself and over 60% of the country's population in the capital region; Iceland had 394,324 inhabitants at the start of 2026. The economy rests on tourism, fishing, geothermal and hydro power, aluminium production, technology and creative industries. The city is small, safe and very expensive, and nature - volcanoes, glaciers, geysers - begins right outside it.

Reykjavik suits professionals with a contract from an Icelandic employer, citizens of the European Union and the European Economic Area, creatives and anyone who values safety, nature and equality. It suits less those seeking a warm climate, an inexpensive life or a wide choice of jobs.

Districts

• Centre, postcode 101 - the old town with colourful houses, Laugavegur street, cafés and bars, the highest rents.
• Vesturbær - a quiet western district by the sea with the university and swimming pools.
• Hlíðar and Laugardalur - residential districts near the centre with parks, sports complexes and schools, popular with families.
• Breiðholt and Grafarvogur - outer residential districts, lower rents, a car is needed.
• Kópavogur and Hafnarfjörður - neighbouring towns of the capital region with newer housing.

Housing and prices

A one-bedroom flat in Reykjavik costs 220,000-300,000 Icelandic krónur a month in 2026 ($1,798-2,451), and up to 350,000 in the centre. Supply is tight, competition high and leases often short. A monthly bus pass costs 11,600 krónur, about $95. Groceries, restaurants and alcohol are among the most expensive in Europe, but geothermal heating and hot water are cheap.

Taxes

Income tax including the municipal part ranges from 31.49% to 46.29%, corporate tax is 20% and VAT 24%. From a median salary of about 826,000 krónur roughly 597,000 is left in hand. More on the page about taxes in Iceland.

Practicalities

• Climate. Maritime: winters are milder than expected, around zero, but windy and dark, with about four hours of daylight in December. Summers are cool, about 12-14 degrees, but in June it barely gets dark.
• Pools. Geothermal outdoor pools are the main place to relax and socialise, and every district has one.
• Transport. Buses only, and many people drive. Keflavík International Airport is 50 kilometres from the city.
• Language. Icelandic; almost everyone speaks fluent English.
• Healthcare. The public system works well, and registered residents receive care under state insurance after a waiting period.

Moving and legal status

Iceland is not in the European Union but belongs to the European Economic Area and Schengen, so European Union citizens move freely. Others need a work permit as a specialist when the employer could not find a candidate in the European Economic Area, or a permit for family reunification or study. Citizenship under the general rules comes after 7 years in the country with knowledge of Icelandic. Russian citizens need a Schengen visa to enter.

Nature and trips

From Reykjavik people take day trips along the Golden Circle to the geysers, Gullfoss waterfall and the rift between tectonic plates in Þingvellir National Park, to the geothermal Blue Lagoon and to the south coast with its black beaches. The northern lights are visible from September to April, sometimes right from the city. Many residents spend weekends in summer cottages and fishing.

Work and business

Most vacancies are in tourism, construction, healthcare, fishing and tech companies, where English is often the working language. Salaries are high, but so are prices, so the real standard of living is closer to the European average. For one's own business people open a private limited company with minimum share capital of 500,000 krónur, about $4,085. For a citizen of a country outside the European Economic Area, owning a company does not by itself give the right to live in Iceland.

Is Reykjavik worth considering for life

Pros: safety, clean air and water, nature close by, equality and a strong welfare system, English everywhere and Schengen. Cons: very high prices and rents, dark windy winters, a small job market and difficult legal status for citizens of countries outside the European Economic Area. Reykjavik suits those with a contract or a European passport. Write in the chat and we will find a basis for your move.