Iceland’s Parliament Proposes Tax to Fund Lava Barriers

Grindavík earthquakes crevasse

Iceland’s Parliament held its first reading of a bill that proposes an additional 0.08% property tax to fund the building of lava barriers that would protect key infrastructure on the Reykjanes peninsula from a potential eruption. The town of Grindavík, located on the south side of the peninsula, was evacuated last Friday due to strong earthquakes and a magma dyke forming beneath the town. The town and surrounding area have sustained damage to roads, homes, and power and water infrastructure.

Additional property tax to fund barriers

The parliamentary bill proposes levying an additional tax on homeowners in Iceland equivalent to 0.08% of their property’s fire insurance valuation (brunabótamat) in order to fund the building of lava barriers. The owner of a property worth ISK 100 million [$695,000, €650,000] would therefore pay an additional ISK 8,000 [$56, €52] in taxes per year if the bill is passed in its current form.

“Temporary” tax hike

The tax would be imposed for a period of three years and is projected to funnel nearly ISK 1 billion [$6.95 million, €6.5 million] into state coffers. MPs expressed a strong desire to help the residents of Grindavík and protect infrastructure on the peninsula, which includes the Svartsengi Power Plant. However, Pirate Party MP Þórhildur Sunna Ævarsdóttir and Centre Party Chairman Sigmundur Davíð Gunnlaugsson argued that any lava barriers constructed should be paid for with existing tax revenue.

Iceland’s government has imposed such “temporary” taxes in response to natural disasters and to finance disaster prevention measures in the past, many of which later became permanent, as Vísir reports. After the Heimaey eruption in 1973, the government raised sales tax by 2% to help fund rebuilding in the Westman Islands. The hike was supposed to be temporary but was never rescinded.

The second reading of the bill will take place at 7:00 PM tonight. The bill is required to undergo three readings before it can be passed.

Residents allowed to retrieve belongings

All Grindavík residents were permitted to enter the town for a short period this afternoon in order to retrieve belongings and pets. The earthquakes on the peninsula have subsided since Friday and the situation remains largely unchanged since then. The damage caused by the quakes is visible across town, including crevasses across roads and cracks in buildings. While the magma intrusion still stretches across the town, threatening from below, experts are now saying a possible eruption could be smaller than previously feared.

Police Oversees Partial Entry of Additional Grindavík Residents

Traffic into Grindavík following mandatory evacuations

The Chief of Police in Suðurnes has authorised restricted access for residents and businesses to a specific part of Grindavík. This controlled access, meant for essential visits only, does not imply that the area is open for general traffic.

Area remains closed for general traffic

Approximately 900 earthquakes have been recorded in Reykjanes since midnight today, November 13. According to the Icelandic MET Office, the seismic activity is concentrated in the southern part of the fissure between Sundhnúkur and Grindavík at depths of 2-5 kilometers. The situation near Grindavík remains largely unchanged from yesterday; seismic activity decreased since late Friday and early Saturday.

In light of this, the Chief of Police in Suðurnes has again granted limited access to a designated area in Grindavík for residents and businesses today. This area is specified as being east of Víkurbraut and north of Austurvegur, extending up to Ægisgata.

Residents from these neighbourhoods have been directed to a meeting point along Suðurstrandarvegur, where they are currently registering and receiving further instructions for entry. At this moment, vehicles from the response team are prepared to transport individuals into Grindavík.

As noted by the police, this is a carefully managed operation that is not to be taken lightly. The authorisation for access does not imply the area is open for general traffic. Residents of Grindavík permitted into specified neighbourhoods should follow these guidelines:

  • Only go if absolutely necessary.
  • Each household is allowed only one person to enter the area.
  • Prepare a list of items you intend to retrieve before leaving.
  • Remember to bring your house key.
  • Have a pet carrier ready if needed.
  • Bring a bag or container for items.
  • Time inside the home will be limited.
  • Those entering should not have severe allergies to animals, as pets may be brought back.
  • This access is solely for retrieving very important items such as pets, essential medications, possibly passports, or other indispensable household items.
  • Residents may drive vehicles left behind during evacuation out of the area, but only in the company of response personnel.

As noted by IR yesterday, Grindavík suffered significant earthquake damage over the weekend, impacting homes and infrastructure. The Head of the Department of Civil Protection and Emergency Management told reporters yesterday that the ongoing uncertainty regarding a possible eruption means that it is unlikely that Grindavík residents will be able to return to their homes in the near future.

Will the situation on the Reykjanes peninsula affect the capital area?


Many travellers to Iceland have asked about the potential impact that a volcanic eruption on the Reykjanes peninsula might have on Reykjavík. While the usual caveats apply here (when and where the eruption will occur is difficult to tell with precision), the current consensus is that the capital region will remain largely unaffected.

That being said, Reykjavík residents and visitors alike could feel some side effects of the next major eruption in Iceland.

Reykjavík services and utilities

In a worst-case scenario, an eruption could disrupt operations at Svartsengi, a geothermal power plant and the main supplier of water and power to the Reykjanes peninsula. While the Reykjavík area sources its power from other plants, if operations at Svartsengi are disrupted, power from other plants may have to be diverted to keep the lights on in the region. Last winter also saw hot water shortages throughout Iceland, and a disruption to Svartsengi could exacerbate heating prices during the winter. For travellers, this might mean that public pools and geothermal spas could face closures or shortened opening hours.

Draft legislation has also been proposed that would raise property taxes in order to help fund the construction of protective barriers around Svarstengi. A similar increase to sales tax was also introduced to aid in reconstruction after the 1973 Heimaey eruption in the Westman islands. Though these taxes would not be directly passed on to travellers, it is possible that prices could indirectly rise in the wake of a tax hike.

Impact on travel

There has been concern during past eruptions on the Reykjanes peninsula that lava flows could disrupt Reykjanesbraut, the main transport artery between Reykjavík and Keflavík International Airport. This is not currently a concern, as it will likely surface somewhere near the town of Grindavík, located on the south coast of the Reykjanes peninsula.

The latest information from the Icelandic Met Office provides a map of the projected lava flow:

grindavík fissure
Icelandic Met Office Nov 11

Several roads have also been damaged due to seismic activity in the area. Grindavíkurvegur, the main road connecting Grindavík to Reykjanesbraut, was closed on November 10 due to damage. However, road closures are not expected in the capital area.

reykjanes road closures
Umferð – November 13

Though the next eruption is expected to be significantly larger than the previous Reykjanes eruptions, its probable location means that air traffic will likely be unaffected. Located on the south coast of Reykjanes, prevailing wind patterns ought to blow any volcanic fumes south and east, away from the airport.

Health concerns

Previous eruptions have, however, caused some air pollution in the capital area. During the 2022 Meradalir eruption, those with preexisting conditions such as asthma, in addition to children and elderly people, were encouraged to avoid outdoor activity on some days when wind patterns brought the pollution to Reykjavík. As of right now, it is too early to say how an eruption near Grindavík will affect air quality in Reykjavík.

The situation on the Reykjanes peninsula is still unfolding, and it goes without saying that travellers should exercise common sense, stay informed, and listen to the authorities. However, the situation poses no immediate threat to Reykjavík and the greater capital area, and disruptions to the rest of the nation are likely to be minimal.


In addition to following our news coverage, travellers and residents alike may find the following resources useful:

The Icelandic Met Office

SafeTravel, for travel warnings and tips for staying safe.

The Icelandic Road Administration and its live map of road closures throughout Iceland.

The Department of Civil Protection and Emergency Management.

A live webcam stream from Þorbjörn mountain.



Grindavík Homecoming Unlikely in the Near Term

Photo from the mandatory evacuation of Grindavík in Reykajnes

The town of Grindavík has suffered significant earthquake damage, impacting homes and infrastructure. The Head of the Department of Civil Protection and Emergency Management told reporters yesterday that the ongoing uncertainty regarding a possible eruption means that it is unlikely that Grindavík residents will be able to return to their homes in the near future.

More damage than expected

The town of Grindavík, on the Reykjanes peninsula, was succesfully evacuated during the early hours of Saturday, November 12, amid concerns that the intrusion of magma, believed to extend beneath the town, would reach the surface. An emergency phase was declared, and the Red Cross set up three emergency relief centres.

The quakes continued into Saturday. By Sunday, it was clear that major damage being inflicted on the the town, affecting houses, roads, and infrastructure. “The town has suffered extensive damage,” Úlfar Lúðvíksson, Chief of Police in Suðurnes, told RÚV during the evening news yesterday.

Parts of the town have been without hot water and electricity owing to damage to the distribution system of the HS Veitur utility company. Large parts of Grindavík have been too hazardous to enter, and HS Veitur has not allowed its employees to venture into those areas for repairs.

New assessment expected tomorrow

A new assessment from the Icelandic Meteorological Office is awaited and expected to be published tomorrow. The new assessment will provide a clearer picture of the situation, including whether the magma is still rising and how close it has risen to the surface.

Seismic activity has, however, significantly decreased since Friday and Saturday. “There is nothing to suggest that there will be a significant eruption,” Magnús Tumi Guðmundsson, a professor of geophysics, told reporters yesterday, noting that he believes the likelihood of an undersea eruption has diminished.

Unlikely that residents can return soon

Despite a decrease in seismic activity, it is unlikely that Grindavík residents will be able to return to their homes in the near future – even if a volcanic eruption does not occur in the next few days.

Víðir Reynisson, Department Manager of the Department of Civil Protection and Emergency Management, told RÚV yesterday that events were still unfolding, and even if seismic activity continued over the two weeks without an eruption, the evacuation would remain in effect: “Even if the activity completely stops, and scientists believe that this event is over, it will take some time before we can be certain that this activity will not pick up again. Only then will residents be allowed to return home,” Víðir explained.

Víðir also noted that if an eruption occurs that is far from Grindavík, the evacuation would continue to be in place; such an eruption could last for some time.

Admitted into the safest neighbourhood

Residents of the Þórkötlustaðahverfi neighbourhood in Grindavík, in the easternmost part of town, were afforded a brief window (ca. 5 minutes) to retrieve their belongings and pets yesterday. One resident, having received help from two Keflavík residents, managed to retrieve 66 animals: 35 sheep, 20 hens, and a cat.

The organisation Dýrfinna has collected information about animals left behind in Grindavík, which include 58 cats, 2 rabbits, 2 hamsters, 49 horses, 50 chickens, 13 parrots, 130 pigeons, 204 sheep, and 15,000 chickens. Despite hoping that they would be allowed to enter Grindavík to rescue pets, the authorities refused to admit anyone into the town, aside from residents of the Þórkötlustaðahverfi neighbourhood.

Decisions made tomorrow morning

Once a new risk assessment is available tomorrow morning, a decision will be made regarding the next steps. “We are doing what we can to accommodate the people of Grindavík, allowing them to access essential items in their homes,” Úlfar Lúðvíksson told RÚV yesterday.