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Buying property in Madeira provides an opportunity to own a home in one of Portugal’s most beautiful regions. This guide explains every step of the process, from choosing the right location to completing the paperwork. You will understand how to explore neighborhoods, plan your budget, and secure financing to make the purchase easier.
When buying a house in Madeira, it is important to know about local property prices and taxes to avoid unexpected costs. Madeira real estate offers a variety of options, from modern apartments to traditional villas. You will also learn how to work with real estate agents and legal experts to make sure everything runs smoothly.
This guide walks you through the paperwork and legal checks needed when buying property in Madeira real estate. Whether you are looking for a home or an investment opportunity, following the steps correctly will make buying a house in Madeira an easy and rewarding experience.
Why Should You Buy Property in Madeira?
Buying property in Madeira is straightforward and attractive for international buyers. Full foreign ownership is allowed, with no restrictions on nationality, meaning non-residents can buy property in their own name with the same rights as Portuguese citizens.
Madeira Portugal real estate market is also more affordable compared to Lisbon. While prices have increased in recent years, Madeira still offers better value, especially for larger apartments, sea-view properties, and houses with outdoor space. Many buyers find they can afford more space and better locations than in mainland city centres.
Strong rental demand is driven by year-round tourism. Madeira attracts visitors in every season, not just summer, which supports both short-term holiday rentals and medium-term lets. Well-located properties in areas such as Funchal and the south coast tend to perform consistently.
Finally, Madeira offers a high quality of life. Residents benefit from reliable healthcare, including public hospitals and private clinics, a high level of safety, and a relaxed lifestyle supported by mild weather and nature. For many buyers, this combination of lifestyle and investment potential makes Madeira a compelling choice.
Living on Madeira, Portugal Overview
Living in Madeira is very much about everyday routines shaped by the island itself. Most people start their day with a coffee at a local café, often overlooking the ocean, before heading to work, school, or the market.
Many newcomers choose to live in Funchal, particularly areas like São Martinho or Santa Luzia, because everything is close by—private hospitals, schools, supermarkets, gyms, and restaurants. Those wanting quieter surroundings often move to places like Câmara de Lobos or Ribeira Brava, where life feels slower but still well connected.
Climate in Madeira
Weather is one of the main reasons people stay. Even in January, it’s common to have lunch outside in the sun. Summer is warm but rarely uncomfortable, and evenings cool down naturally. Many residents swim in the sea all year, walk the levadas on weekends, or simply enjoy long walks along the promenade in Funchal after work.
Culture in Madeira
Madeira feels personal. Shop owners know their regular customers, and local festivals still matter. Events like village festas, Sunday family lunches, and local markets are part of normal life, not tourist attractions. Food is simple and fresh—grilled fish, seasonal vegetables, and bread from the local bakery. Life runs at a calmer pace, especially once you step away from tourist hotspots.
Transport in Madeira
Driving is the most common way to get around. Roads are modern and surprisingly efficient given the terrain, with tunnels connecting most parts of the island. From Funchal, you can reach the airport in about 20 minutes, and most coastal towns are within 30 to 40 minutes. Buses work well in the city, but outside Funchal a car makes daily life much easier.
Expats in Madeira
Expats are part of everyday life, not a separate community. You’ll find them working remotely from cafés, walking dogs along the seafront, or chatting with neighbors at the market. English is widely spoken in services, but many long-term residents learn Portuguese and integrate easily. Madeira tends to attract people looking for stability, good weather, and a simpler, more balanced lifestyle.
Types of Available Property in Madeira
When buying property in Madeira, the type of home you choose is closely linked to location and lifestyle. Below are the most common property types in Madeira real estate and where they are typically found on the island.
Apartments
Apartments are most common in Funchal, particularly in areas such as São Martinho, Lido, and Santa Luzia. These are popular with expats and long-term residents who want easy access to shops, hospitals, restaurants, and the seafront. You’ll also find apartment buildings in Santa Cruz and Câmara de Lobos, often offering sea views and parking.
Detached Houses
Detached houses are widely available outside the city centre, especially in areas like Calheta, Ponta do Sol, and Ribeira Brava. These homes often come with gardens, terraces, and more privacy, making them ideal for families, retirees, or buyers looking for space and outdoor living.
Luxury Real Estate
Luxury properties in Madeira Portugal real estate are typically found along the south coast, where the climate is sunniest. Prime locations include Funchal’s Lido area, Calheta, and exclusive hillside zones with panoramic ocean views. These properties often include modern architecture, pools, large terraces, and high-end finishes.
Rental Properties
Renting-out properties are most common in Funchal, Câmara de Lobos, and tourist-friendly coastal areas. Apartments close to the seafront and town centres are especially popular for both short-term holiday lets and long-term rentals. Madeira’s year-round tourism and growing expat population help maintain steady rental demand.
Property Prices in Madeira, Portugal, 2026
Property prices in Madeira real estate reflect the island’s growing appeal among residents, expats, and investors. While prices vary by location, Madeira remains more affordable than mainland hotspots like Lisbon. In 2026, the average property price is around €3,715 per m², offering good value when compared with quality of life, space, and views.
Below are average residential property prices per square metre in 2026:
- Calheta: €4,134 / m²
- Câmara de Lobos: €2,953 / m²
- Funchal: €3,861 / m²
- Machico: €2,888 / m²
- Ponta do Sol: €3,434 / m²
- Santa Cruz: €3,024 / m²
- Santana: €1,746 / m²
- Porto Santo: €3,729 / m²
Prices tend to be higher along the sunnier south coast and in areas with strong demand from expats and tourists, while northern and less central locations still offer more accessible entry points.
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Best Areas on Madeira Island to Buy Property
1. Funchal
Funchal is where most people start—and many decide to stay. Daily life is easy here: supermarkets, private hospitals, schools, gyms, cafés, and restaurants are all close by. Neighborhoods like São Martinho and Santa Luzia are especially popular with families and expats because you can walk to most services. If you like being able to step outside for dinner, a coffee, or a seaside walk without needing a car, Funchal makes sense.
2. Calheta
Calheta appeals to buyers looking for space, sun, and a calmer pace. It’s common to see people finishing work and heading straight to the marina or the beach. Many homes here have sea views and outdoor areas, and weekends are often spent hiking or enjoying lunch by the water. It’s popular with families and retirees who want quiet living without feeling isolated.
3. Ponta do Sol
Ponta do Sol feels like a small village where people still greet each other on the street. It’s known for being one of the sunniest spots on the island. Life here is simple and relaxed—morning coffee by the sea, short drives to Funchal, and evenings that actually feel quiet. Buyers who work remotely or want a slower routine are often drawn here.
4. Câmara de Lobos
Câmara de Lobos has a strong local character. Fishing boats in the harbour, small restaurants serving fresh fish, and colorful streets give it a very Madeiran feel. Many buyers choose it because it’s close to Funchal but feels more traditional. It’s ideal if you want to live among locals while still being minutes from the city.
5. Santa Cruz
Santa Cruz is practical and understated. Its proximity to the airport makes travel easy, but once you’re home, it’s surprisingly calm. The town has good schools, services, and seaside walking areas. It suits buyers who value convenience and prefer a quieter residential setting.
6. Porto Santo Island
Porto Santo is for those who truly want to slow down. Life revolves around the beach, long walks, and a small, close-knit community. Many buyers choose it as a second home or a long-term escape rather than a busy base. If waking up near a sandy beach and living at island pace appeals to you, Porto Santo stands apart.
Process of Buying Property in Madeira
The process of buying property in real estate Madeira island Portugal is very similar to mainland Portugal and typically takes around 3 to 6 months, depending on due diligence, financing, and the complexity of the transaction.
1. Get a Portuguese Tax Number (NIF)
The NIF is essential for any property purchase in real estate in Madeira Portugal. It’s required to sign contracts, open a bank account, and pay taxes. Non-residents usually obtain it through a fiscal representative.
2. Open a Portuguese Bank Account
A local bank account is needed to pay deposits, taxes, notary fees, and ongoing property costs such as utilities or condominium fees.
3. Hire a Portuguese Lawyer
While not mandatory, hiring a local lawyer is strongly recommended for investing in real estate in Madeira Portugal. A lawyer will carry out legal checks, confirm ownership, licenses, and ensure there are no debts or issues attached to the property.
4. Sign the Promissory Contract (CPCV):
Before signing, legal due diligence is completed. The CPCV secures the purchase, and the buyer typically pays a 10% deposit. This contract sets out the conditions and timeline leading to completion.
5. Final Deed and Registration
The process concludes with the signing of the final deed before a notary, payment of remaining funds and taxes, and registration of the property in the buyer’s name.
Property Taxes and Costs
When buying in real estate Madeira island Porrtugal, it’s important to look beyond the asking price and understand the full range of costs involved. These are standard across Portugal and apply in Madeira as well.
You’ll need to pay IMT (Property Transfer Tax) at the time of purchase. This is calculated on a sliding scale based on the property’s value, and for second homes it typically ranges from 1% to 7.5%, depending on the price.
Stamp Duty is more straightforward. It’s charged at a flat rate of 0.8% of the purchase price and is paid at completion.
You should also budget for notary, land registry, and legal fees, which usually come to between €1,000 and €2,500 in total, depending on the transaction and legal support involved.
Once you own the property, there’s an annual municipal tax (IMI) to consider. This is based on the property’s tax value and generally falls between 0.3% and 0.45% per year.
If you later sell the property at a profit, capital gains tax may apply. For non-residents, the standard rate is 28%, although certain costs—such as documented renovation or improvement expenses—can be deducted to reduce the taxable gain.
Is Real Estate Madeira a Good Investment?
Benefits and Pitfalls of Buying Property in Madeira
Benefits of Buying Property in Madeira
- Mild, year-round climate and high quality of life
- Attractive lifestyle for relocation, retirement, and long-term living
- Property prices often lower than mainland premium areas
- Growing international demand supporting long-term value
Pitfalls of Buying Property in Madeira
- Short-term rental (Alojamento Local) licensing is not guaranteed and can be restricted by building or location
- Older or rural properties may have planning or licensing irregularities
- Steep terrain can affect access, parking, and daily convenience
- Higher maintenance costs due to humidity, sea air, and hillside locations
Tips for Buying Property in Madeira
- Focus on location and accessibility, especially road access and proximity to Funchal if you plan to live there year-round.
- Check planning and licensing carefully, as hillside and rural properties may have restrictions.
- Consider climate and orientation—sun exposure and altitude can make a big difference in comfort.
- Work with a local lawyer and Portugal buyer’s agent to verify ownership, licenses, and property boundaries.
- If buying for investment, assess long-term rental demand, as short-term rental rules can vary by area.
Popular Alternatives for Buying Property in Portugal
Lisbon
Ideal for buyers prioritising city living, strong rental demand, and long-term capital growth, with a more dynamic and fast-paced lifestyle than Madeira.
Algarve
A top choice for lifestyle and holiday-home buyers, offering beaches, established expat communities, and a strong rental market, especially in coastal areas.
Porto
Known for its character and riverside setting, Porto appeals to buyers seeking charm, culture, and more accessible prices compared to Lisbon.
Azores
Suited for buyers looking for affordability, nature, and a slower pace of life, offering a more rural and less tourist-driven alternative to Madeira.
Exploring Visa and Immigration Options for Portugal for Real Estate Investors
Portugal offers several visa options for those looking to relocate, invest, or work remotely. The Golden Visa suits investors seeking residency through qualifying investments, while the D7 Visa is ideal for retirees or individuals with passive income. Entrepreneurs often choose the D2 Visa to start or grow a business, and highly qualified professionals can apply for the D3 Visa with a valid job offer. Remote workers and freelancers are well covered by the Digital Nomad Visa, allowing them to live in Portugal while working for overseas clients or employers.
However, moving to a new country isn’t just about visas. If you’re thinking of buying property or renting in Portugal, our guides offer valuable insights. You can also explore the full process in our comprehensive Portugal immigration guide, including dedicated resources for Americans moving to Portugal. Finally, obtaining a NIF (Portuguese tax number) and opening a Portuguese bank account are essential first steps, as they are required for most aspects of daily life and relocation.
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Frequently Asked Questions
Can foreigners buy property in Madeira?
Yes, foreigners can buy property in Madeira with no restrictions. The process is similar for both residents and non-residents.
Can I get a mortgage when buying property in Madeira?
Yes, Portuguese banks offer mortgages to residents and non-residents based on income and other financial factors.
Can I rent out my property in Madeira for income?
Yes, many people invest in Madeira real estate to generate income through short-term or long-term rentals.
Do I need a lawyer when buying a house in Madeira?
Yes, hiring a lawyer helps verify the property’s legal status and ensures a smooth transaction.
How long does it take to buy property in Madeira?
The process usually takes two to three months from signing the contract to completing the registration.
Can I sell my property in Madeira easily?
Yes, Madeira real estate continues to attract buyers, making it possible to resell your property without difficulty.
Where do expats live in Madeira?
Funchal is the most popular, especially central and coastal neighbourhoods, thanks to services, healthcare, and walkability. Other favourites include Câmara de Lobos and Santa Cruz, which offer a more residential feel while staying close to Funchal. For those seeking quieter living and ocean views, hillside areas like Calheta are also very popular.
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