The Icelandic Government presented its 2027 Budget at a press conference on 7 September 2026, formally introducing it to Parliament on 10 September 2026. The Budget proposes extending the prevention fee (also known as Lavy levy) into 2027, with continued revenue of approximately ISK 1,200 million budgeted for the fee.
The Lava Levy was introduced under Act No. 84/2023, effective from 1 January 2024, to fund protection of critical infrastructure on the Reykjanes Peninsula. Under Article 5 of the same Act it is currently set to be retired on 31 December 2026. The levy is charged at a rate of 0.08‰ (per mille) on the fire-insurance value of insured property.
The Budget Bill remains before Parliament and has not yet been approved; the extension is contingent on passage of the accompanying Bill amending various acts in connection with the 2027 Budget.
