2026 Budget Approved by the Town Council

The 2026 budget for Hafnarfjörður Municipality, approved by the town council today, anticipates a surplus of ISK 2,087 million for the municipality’s A and B sections next year. Operations in the A section are expected to be positive by ISK 942 million in 2026 according to the plan. Operating cash flow is projected to be 6.9% of total revenues, or ISK 3,983 million.

A strong foundation in the town

Mayor Valdimar Víðisson says the municipality’s finances are strong. “The people of Hafnarfjörður deserve a reliable foundation in their town, a community that supports its residents and businesses. This requires responsible management and a municipality that takes good care of its people.”

The municipality’s debt ratio is projected at 92.6% at the end of 2026, well below the 150% limit set by regulations on financial benchmarks and municipal financial oversight. The municipal income tax rate will remain unchanged at 14.93%. The property tax rate on residential property will decrease from 0.217 to 0.1999, and the rate on commercial property will decrease from 1.387 to 1.367.

Responsible, stable management

Valdimar emphasizes that Hafnarfjörður has built responsible operations that deliver stability, predictability, and flexibility to continue developing a strong and trustworthy community. “The 2026 budget supports these goals after challenging years in the external environment. We maintain core services and prioritize investments that strengthen schools, sports, the environment, and infrastructure for the future,” he says. “I am proud of the results we have achieved in consultation with the town’s residents, to the benefit of us all.”

Hafnarfjörður is the third-largest municipality in Iceland, with nearly 33,000 residents. Total projected expenditures are ISK 50.5 billion, projected personnel costs are ISK 27.1 billion, and projected financial costs are ISK 2.6 billion.

Key figures from the 2026 budget

• Operating surplus for A and B sections: ISK 2,087 million
• Operating surplus for A section: ISK 942 million
• Debt ratio projected at 92.6% at year-end 2026
• Projected operating cash flow for A and B sections: ISK 3,983 million or 6.9% of total revenues
• Municipal income tax remains at 14.93%
• Property tax rates on residential and commercial property decrease, with real property charges expected to fall in real terms on average year-to-year
• General fee increases are projected at 3.9% to meet inflation and wage increases
• Planned investments total nearly ISK 10.6 billion, with the largest single investment in a new school in Hamranes

The Hafnarfjörður municipal budget was submitted for second reading and approved at the town council meeting on Wednesday, December 3, 2025. The budget covers next year and includes a three-year plan for 2027–2029.

Explanatory report accompanying the budget in Icelandic