Investment property: Madeira

Updated 6 October 2026

Madeira: we show what makes sense for you to buy, vet the seller and the property, and close the deal.

Madeira is an autonomous region of Portugal, so property here is bought under Portuguese rules: without permits or nationality restrictions, with a Portuguese tax number and a deal before a notary or at a state completion centre. Demand centres on Funchal and the island's south coast, with a mild climate all year, and on remote workers and retirees from Europe. Dollar amounts use the European Central Bank rate of 5 October 2026, $1.12 per euro.

Does buying give residence

No. Since October 2023 buying property in Portugal, including Madeira, no longer grants investor residence. People move on the passive income visa, digital nomad visa, work or business; see our pages Portugal residence and digital nomad visa. Owning a home on the island helps: it proves an address and lowers the costs assessed in the application.

Taxes and costs on purchase

• Property transfer tax: progressive, with 7.5% of the price for expensive homes. Rates for second homes and investments are higher than for your own main home.
• Stamp duty: 0.8% of the price. On a €400,000 flat, about $448,200, that is €3,200, about $3,590.
• Notary and registration of title in the land registry are paid separately.

Owner's taxes

• Annual municipal property tax on the cadastral value at a rate set by the municipality.
• An additional tax on high-value property applies if the owner's total cadastral value of housing exceeds the set threshold.
• Rental income is taxable in Portugal for non-residents too.
• Holiday letting requires local holiday accommodation registration and compliance with municipal rules.

How the purchase works

1. A Portuguese tax number and a Portuguese bank account.
2. Shortlisting and checks: land registry extract, cadastre, the habitation licence, owners' association debts.
3. Promissory contract with a deposit, usually 10-20%.
4. Payment of transfer tax and stamp duty before signing.
5. Final deed before a notary or at a state completion centre and title registration.

Buyer's documents

• passport and Portuguese tax number;
• proof of the origin of funds, which the notary and bank must check;
• documents on marital status and the spouses' property regime;
• a power of attorney if a representative handles the deal.

Island specifics

• The terrain is steep: access, parking and retaining walls matter as much as the view.
• Some houses were built or altered without the required permits; this is checked against municipal records.
• Supply is limited, and demand from remote workers supports prices in Funchal.

Risks

• Unlawful extensions and no habitation licence.
• The seller's debts to the owners' association or for property tax.
• Plans for holiday letting without checking municipal restrictions and building rules.
• Buying without a lawyer's check: debts, encumbrances and unlawful buildings show up only in registry and municipal documents.

What we do

We obtain the tax number and account, shortlist a property, check documents at the registry and municipality, calculate taxes, and support the promissory contract, final deed and registration with locally licensed partners. If your goal is to move, we choose the visa and link the purchase to it.

What we do

• Property shortlist for your investment goal
• Legal due diligence on the property
• End-to-end transaction support
• Ownership structuring (company, trust)
• Property management and letting

See also

Company formation

FAQ