I can't seem to find any definitive list on what to bring for July specifically and I don't want to underestimate what to expect!
What are your plans? It will depend on your activities and how much time you plan to spend outside.
In general light baselayers (longsleeve), fleece midlayer and wind- and waterproof outer layers (top and bottom) plus waterproof shoes or boots with good tread. I would also bring a light knit hat and light gloves as well as a neck gaiter.
You could bring a t-shirt and shorts in case you get hot easily and have a warm summer day, but you should be prepared for windy and rainy weather.
Warm layers and waterproof jacket. Waterproof pullover pants if you have room. Waterproof or at least rain resistant shoes. Snow boots are not needed, A pair of gloves and a hat.
I was in Iceland last July, and experienced the full range of weather conditions except winter snow. Here are some suggestions based on that experience:
Weatherwise, in July expect just about anything except deep winter conditions (even in winter, Iceland doesn't usually get that cold). Even in summer, however, if you head to the glaciers for example you can still be surrounded by ice and snow.
Layers are key, though are also a nuisance if you're stuck on an over-crowded tour bus (it can be difficult to find the elbow room to add and shed layers each time you make a stop).
In Iceland, it's not so much the cold as the wind and rain that will sap your warmth - and your spirit, if you're not properly prepared. A good wind- and waterproof outer shell are key.
You also need to consider how much time you will spend out of doors - and how much time on sometimes cramped and overheated buses, Super Jeeps, car rentals and the like. See the note about layers, above.
As for activities, of course the more time you spend out of doors the more you need to prepare for the variable weather.
Certain activities, such as snowmobiling, lagoon paddling, and diving and snorkeling require specialized gear and clothing which will most likely be provided by your guide company (though it's worth double checking).
Self-guided backcountry activities such as extended hikes should only be attempted by people with enough prior knowledge and experience to prepare their own what-to-wear list :-)
There are useful resources online. Here's a long-winded but thorough discussion amongst many knowledgable locals and travers at TripAdvisor https://www.tripadvisor.ca/ShowTopic-g189970… (213 posts and counting!)
Iceland Guides have prepared a useful guide to what to wear glacier hiking, which can also be applied to other activities, and winter conditions in general https://www.glacierguides.is/blog/how-to-dre… This page also provides a useful overview of what to expect in Iceland.
I have posted about this topic, and will continue to update the page as needed at https://medium.com/p/1228d65c8ae2/edit
Thank you guys! All very helpful