Keflavik, Iceland
Iceland's international gateway city, home to Keflavik Airport and a growing community of remote workers.
Overview
Keflavik is a city in Reykjanes with a population of 16,000. Iceland’s international gateway city, home to Keflavik Airport and a growing community of remote workers. Housing costs are close to the national average. The overall cost of living is below the national average. Gardening thrives here — the 5b growing zone supports Cool — many vegetables, some fruit trees. Sunshine is limited, with about 125 sunny days a year. Reported crime rates are relatively low. The population skews young, with a median age of 30.0.
Last updated: August 30, 2026
Below Average vs Iceland Avg (100)
Affordable
Household income
Job market health
Keflavik vs Iceland Average
Taxes
- State Income Tax: 31.5%
- Sales Tax: 24.0%
Economy & Jobs
- Median Income: ISK 5,400,000
- Unemployment: 3.0%
- Population: 16,000
Climate
- Sunny Days: 125/year
- Summer High: 56°F
- Winter Low: 30°F
- Farming Zone: USDA Zone 5b
Housing
- Median Home: kr35,000,000
- 1BR Rent: kr170000/mo
Cost of Living
Keflavik's cost of living index is 85 (Iceland average = 100).
| Category | Keflavik | National Average | Difference |
|---|---|---|---|
| Overall | 85 | 100 | -15.0% |
| Housing | 90 | 100 | -10.0% |
Data source: Council for Community and Economic Research (C2ER), 2026
Housing Market
| Metric | Value |
|---|---|
| Median Home Price | kr35,000,000 |
| Median Rent (1BR) | kr170000/mo |
| Median Rent (2BR) | kr212,500/mo |
| Price per Sq Ft | kr23,333 |
Data source: Zillow Research, 2026
True Cost of Home Ownership
Utilities
Estimated monthly utility costs for a typical household in Keflavik:
| Utility | Estimated Monthly Cost | Notes |
|---|---|---|
| Electricity | kr10000 | |
| Heating & Cooling | kr139 | Estimated based on local climate. |
| Cooling (AC) | N/A | Estimated based on local climate and electricity rates |
| Water | kr3000 | Includes sewer |
| Internet (100+ Mbps) | kr7000 | Broadband average |
| Garbage / Trash | Included in taxes | Municipal service (covered by property taxes) |
| Total Utilities | kr20139 | Monthly estimate (including heating & cooling) |
Data sources: U.S. Energy Information Administration (EIA) 2024, EPA/AWWA water rate surveys, BroadbandNow
Remote Work Score
Keflavik scores —/100 for remote work readiness:
Climate
Keflavik has a varied climate with distinct seasons.
| Month | Avg High | Avg Low | Rainfall |
|---|---|---|---|
| January | 50°F | 30°F | 2.5" |
| April | 41°F | 45°F | 2.8" |
| July | 56°F | 31°F | 1.5" |
| October | 36°F | 48°F | 2.2" |
Cool — many vegetables, some fruit trees
Natural Hazards
Keflavik faces the following natural hazards:
Highly active volcanic region with frequent eruptions.
Active seismic zone with significant earthquake risk.
Iceland experiences severe winter storms.
Volcanic terrain with landslides.
Volcanic terrain with avalanches.
Based on historical records and geographic risk assessment.
Taxes
- State Income Tax: 31.5%
- Sales Tax: 24%
- Property Tax: ~0.5% of assessed value
Economy & Jobs
Major industries include technology, healthcare, education, and manufacturing. The unemployment rate is 3.0%.
Schools & Education
Academic Schedule
Standard academic calendar.
Demographics
The population of Keflavik is diverse. The figures below show the ethnic, educational, and religious composition of the local population.
Ethnicity
Education
Religion
City-level demographic data is not available for this location. The figures shown are national averages, which may differ from actual conditions in this city.
Data source: Statistics Iceland (2022)
Important Disclaimer: All data on this page is for informational purposes only and does not constitute financial, legal, tax, or real estate advice. URCity and Northshore Press are not financial advisors, tax professionals, or real estate agents. Always consult qualified professionals before making relocation or financial decisions.
Frequently Asked Questions
What is the cost of living in Keflavik, Iceland?
The cost of living index in Keflavik is 85, which is Lower the Iceland national average of 100.
How much does it cost to buy a home in Keflavik?
The median home price in Keflavik is kr35,000,000. The housing index is 90.
What is the average rent for a 1-bedroom apartment?
The average rent for a 1-bedroom apartment in Keflavik is approximately kr170000/mo.
Does Keflavik, RE have income tax?
Keflavik is in RE, which has an income tax rate of 31.5%.
What is the climate like in Keflavik?
Keflavik enjoys approximately 125 sunny days per year. Summer highs reach around 56°F, while winter lows can drop to around 30°F.
Data Sources
- Cost of Living: Council for Community and Economic Research (C2ER), 2026
- Housing Data: Zillow Research, 2026
- Income & Employment: US Census Bureau American Community Survey, 2024
- Utilities U.S. Energy Information Administration (EIA) 2024, EPA/AWWA water rate surveys, BroadbandNow
Data last updated: September 13, 2026. Data may not reflect current market conditions. Always verify with local sources before making relocation decisions.