Luxury Vacation Rentals in Iceland for a Unique Experience
Planning your dream trip to Iceland but struggling to find the perfect vacation rentals in Iceland? With so many options, it’s easy to end up with disappointing accommodations – freezing rooms, bad locations, or missing out on Iceland’s breathtaking landscapes right outside your window.
You shouldn’t have to compromise on comfort when visiting this magical destination. The solution? Our curated guide to Iceland’s best luxury vacation rentals helps you book an extraordinary stay that matches your travel dreams.
Top Luxury Vacation Rentals in Iceland 2025
Iceland has some of the most special and high-end vacation rentals you’ll find anywhere. Whether you want a cozy cabin under the Northern Lights, a fancy house with a private hot tub, or a quiet escape in the middle of nature, there’s something perfect for you.
Here are the best types of luxury rentals you can book in Iceland:
1. Private Cabins with Hot Tubs
Perfect for Couples & Relaxation
These secluded cabins give you privacy, amazing views, and your own hot tub—ideal for a romantic getaway or peaceful solo trip.
What You’ll Love:
- Glass-roof cabins – Fall asleep under the stars (or Northern Lights in winter).
- Wooden cottages with hot tubs – Soak in warm water while surrounded by nature.
- Cliffside retreats – Wake up to ocean or mountain views right outside your window.
Best For:
- Romantic trips
- Northern Lights viewing
- Quiet time in nature
Where to Stay:
- Near Reykjavik (easy access to the city)
- Golden Circle (close to famous sights like Geysir and Gullfoss)
- South Coast (near black sand beaches and glaciers)
2. Luxury Villas & Big Houses
Great for Families & Groups
If you’re traveling with family or friends, these spacious homes give you plenty of room, full kitchens, and often private hot tubs or pools.
What You’ll Love:
- Big windows with stunning views – See mountains, waterfalls, or the ocean from inside.
- High-end kitchens – Cook your own meals with local Icelandic ingredients.
- Game rooms & outdoor spaces – Perfect for group fun.
Best For:
- Family vacations
- Group trips (6+ people)
- Travelers who want extra space
Where to Stay:
- Reykjavik (for city luxury)
- South Coast (near waterfalls like Skógafoss)
- Lake Mývatn (for geothermal hot springs)
3. Unique & Instagram-Worthy Stays
For a One-of-a-Kind Experience
Want something different and memorable? Iceland has some of the coolest rentals you’ll ever see.
What You’ll Love:
- Bubble hotels – Sleep in a clear dome under the stars.
- Lighthouse stays – Live in a historic lighthouse by the sea.
- Eco-friendly domes – Futuristic homes with panoramic nature views.
Best For:
- Bucket-list experiences
- Amazing photos
- Travelers who love unusual places
Where to Stay:
- Snæfellsnes Peninsula (dramatic coastal views)
- Eastfjords (quiet and remote)
- Highlands (for adventure seekers)
4. Cozy Farm Stays
For an Authentic Icelandic Experience
Stay on a real Icelandic farm and enjoy peaceful countryside vibes—with luxury touches.
What You’ll Love:
- Meeting friendly farm animals (like Icelandic horses or sheep).
- Fresh, local food (some places include homemade breakfast).
- Total peace and quiet (far from crowds).
Best For:
- Nature lovers
- Cultural experiences
- Relaxing escapes
Where to Stay:
- Westfjords (remote and beautiful)
- South Iceland (near waterfalls and glaciers)
- North Iceland (great for horse riding)
5. Luxury Treehouses & Elevated Retreats
For Nature Lovers
Sleep high above the ground in stylish treehouses with modern comforts.
What You’ll Love:
- Waking up to treetop views of Icelandic forests
- Glass-walled designs that bring nature inside
- Secluded locations perfect for bird watching
Best For:
- Unique nature immersion
- Peaceful forest escapes
- Photography enthusiasts
Where to Stay:
- Near Þingvellir National Park
- East Iceland’s lush woodland areas
- The Reykjanes Peninsula
6. Luxury Glamping Tents
For Comfortable Adventure
Experience Iceland’s wilderness without sacrificing comfort in high-end safari tents.
What You’ll Love:
- King-size beds with premium linens
- Private decks with mountain views
- Some include butler service or private chefs
Best For:
- Summer midnight sun experiences
- Comfortable camping enthusiasts
- Those wanting to stay at remote locations
Where to Stay:
- The Highlands (summer only)
- Near Landmannalaugar
- Þórsmörk Nature Reserve
7. Historic Luxury Lodgings
For Culture Seekers
Stay in beautifully restored traditional Icelandic buildings with modern luxuries.
What You’ll Love:
- 19th-century turf houses with heated floors
- Converted fishing huts with ocean views
- Heritage-listed buildings with spa facilities
Best For:
- History and culture buffs
- Those wanting authentic Icelandic charm
- Travelers who appreciate architecture
Where to Stay:
- The Westfjords (for fishing heritage)
- North Iceland’s historic towns
- The old harbor districts
Tips for Booking the Perfect Luxury Rental in Iceland
Booking the right luxury rental in Iceland makes all the difference for your trip. These simple tips will help you find the perfect place to stay.
Book as early as you can
The best luxury rentals in Iceland get reserved months in advance, especially for summer travel and Northern Lights season. If you have your heart set on a special glass cabin or designer villa, try to book at least 6-12 months ahead. Last-minute options are usually limited, and you might miss out on dream properties if you wait too long.
Take time to read reviews
Recent guest feedback tells you what a place is really like. Look for comments about cleanliness, comfortable beds, and helpful hosts. Pay attention to any mentions of misleading photos or problems with heating – these are important in Iceland’s climate. Properties with no reviews or only old reviews might be risky choices.
Check the amenities carefully
Make sure your rental has everything you’ll need. Reliable heating is essential year-round, and good WiFi matters if you plan to work or stream. A well-equipped kitchen helps save money since eating out in Iceland is expensive. If privacy is important, confirm you’ll have your own bathroom. Some luxury rentals even include special extras like robes, slippers, or welcome snacks.
Think about location
Consider how much solitude you want versus easy access to attractions. Rentals near Reykjavik or the Golden Circle are convenient but less private. For peaceful escapes, look at the Westfjords or Eastfjords, but remember these remote areas require more driving. Always check if the property is accessible in winter – some mountain roads close when it snows.
Watch for extra costs
The listed price might not include everything. Some rentals charge additional fees for cleaning, hot tub use, or late check-ins. Others require a security deposit. Read the full pricing details before booking to avoid surprises. It’s also smart to check the cancellation policy in case your plans change.
Consider booking directly
While big rental sites are convenient, many luxury properties have their own websites with better rates and policies. A quick Google search of the property name might lead you to special offers or packages that include tours or meals. Direct bookings often mean better communication with your hosts too.
Conclusion:
Iceland’s luxury vacation rentals offer something special for every traveler whether it’s a private cabin under the Northern Lights or a chic villa with geothermal hot tubs. By following these simple tips and choosing the right rental, you’ll enjoy comfort, stunning views, and memories that last a lifetime. Start planning today, and get ready for the Icelandic escape you’ve always wanted!
FAQ’S
1. What’s the best time of year to book vacation rentals in Iceland?
Summer (June-August) offers midnight sun and easier travel, while winter (November-March) is ideal for Northern Lights viewing. Shoulder seasons (April-May & September-October) often have better rates and fewer crowds.
2. Are luxury vacation rentals in Iceland worth the extra cost?
Absolutely! Higher-end rentals provide better locations, private amenities like hot tubs, and authentic Icelandic designs that enhance your experience. Many include perks like concierge services or private tour bookings.
3. How far in advance should I book my Iceland vacation rental?
For peak seasons (summer and Christmas/NY), book 6-12 months ahead. For other times, 3-6 months is usually sufficient. Popular unique stays like glass igloos often sell out a year in advance.
4. What amenities should I look for in an Iceland luxury rental?
Prioritize reliable heating, hot water, good WiFi, a well-equipped kitchen, and private bathrooms. Luxury bonuses include geothermal hot tubs, floor-to-ceiling windows, and EV charging stations.
5. Which areas of Iceland have the best luxury vacation rentals?
The Golden Circle, South Coast, and Reykjavik offer the most options, while the Westfjords and Eastfjords provide more secluded, unique properties. Choose based on your itinerary and desired experience.
