Calls for Stricter Regulations On Foreign Land Ownership Skip to content

Calls for Stricter Regulations On Foreign Land Ownership

An increased number of wealthy foreign entities making large purchases of rural land in Iceland has prompted significant bipartisan concern, Kjarninn reports. Iceland’s Minister of Transport and Local Government hopes that a bill putting restrictions on the foreign purchase of Icelandic land will be ready for parliamentary review by the fall.

Foreign entities buying up properties in rural areas

Earlier this week, Morgunblaðið reported that Fljótabakki ehf., an Icelandic subsidiary of an American travel company called Eleven Experience, had purchased Atlastaðir, a farm in Svarfaðardalur valley in North Iceland, just 20 km [12 mi] from the village of Dalvík. Eleven Experience already owns and maintains the luxury hotel and spa called Deplar Farm in Skagafjörður fjord.

Fljótabakki’s land purchase this week is just the latest in a series of buys that the company has made around Fljót, which is located on the eastern side of Skagafjörður. Just last fall, the company purchased the farm Hraun, with the intention of setting up a tourism company there. Prior to that, the company purchased Nefstaðir, on the shore of Lake Stífluvatn, and it also owns the nearby properties of Knappsstaður, Steinavellir, and Stóra-Brekka.

Fljótabakki’s steady acquisition of the property in a remote area is not unprecedented; this week it was also reported that Sólstafir, a company owned by British millionaire Jim Ratcliffe, recently purchased Brúarland 2 in Þistilfjörður fjord in Northeast Iceland. With this purchase, Ratcliffe’s company now owns the majority of fishing rights along the Hafralónsá River, a popular salmon fishing river. Sólstafir had previously purchased other properties in Þistilfjörður, as well as in Vopnafjörður.

‘Significant and broad political will to put in place a stricter framework’

Minister of Transport and Local Government Sigurður Ingi Jóhannsson says that these developments are completely unacceptable and that restrictions that were in place concerning land purchase in Iceland were removed in the course of changes that were made to the law fifteen years ago. He says that the Icelandic government has been looking at provisions that have been put in place in both Denmark and Norway in order to regulate foreign land purchases.

A working group was appointed in September 2018 to review laws about foreign ownership of agricultural properties in Iceland. The group suggested, among other things, that conditions be imposed on the purchasers, such as requiring that they maintain a legal residence at the property. Sigurður Ingi says that the government is currently working to put many of the working group’s recommendations in place, but that there are a number of stumbling blocks that are keeping from doing so, not least in other government ministries. He says, however, that he hopes the bill on land purchasing will be ready in the early fall.

“…[T]he changes that were made around…2003 and 2004 took down all the normal fences when it comes to these things and that has to change,” he told Morgunblaðið. “It’s my opinion that we need to go as far as we can with this.”

In an interview on national radio, Prime minister Katrín Jakóbsdóttir voiced her support for the initiative. “I believe there is a significant and broad political will to put in place a stricter framework around this issue in Iceland, just as we’ve seen throughout our neighbouring countries.”

Read more about this issue here – In Focus: Whose Land is it Anyway

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