Thinking of retiring to Madeira from the UK? Our team of seasoned professionals at Madeira Corporate Services (MCS) understands that choosing the right place to retire is more than sunshine and scenery: peace of mind, financial and tax predictability, and a community (of local and expats) where you feel at home. Madeira Island has historically offered all this and more for many British nationals.
As Portugal’s premier island destination, Madeira combines stunning natural beauty, a temperate climate, and a high quality of life with the benefits of EU residency. While recent changes to Portugal’s tax law and tax benefits—namely the end of the NHR (Non-Habitual Resident) regime—have shifted the conversation around taxation, the Autonomous Region of Madeira continues to be a smart choice for those seeking a retirement that’s both enriching and sustainable.
Here’s everything a potential expat needs to know about retiring to Madeira from the UK, with a clear focus on residency options and taxation in 2025.
Why Retire to Madeira?
Madeira is more than a postcard-perfect island. It offers:
- A year-round mild climate (17°C to 25°C)
- Direct flights to and from the UK (London, Edinburgh, Manchester and Bristol)
- Low crime and high safety standards
- A slower pace of life with modern infrastructure
- Access to Madeira’s Regional Healthcare System (SESARAM), part of Portugal’s public healthcare system.
- English is widely spoken in the service and healthcare sectors
- A welcoming and growing expat community
Whether you’re drawn to the Funchal’s city buzz, the coastal calm of Caniço, the sun-drenched hills of Calheta, or the cooler northern municipalities, the archipelago offers an unbeatable balance of tranquillity and connection.
Retiring to Madeira from the UK: Residency Options
Post-Brexit, UK citizens must apply for residency in Portugal as third-country nationals at the Portuguese consulates with jurisdiction over their residential areas in their home countries. The most suitable pathway for retirees is to apply for the Portuguese D7 Visa, also known as the Portuguese Passive Income Visa.
The D7 Visa: A Simple Path to Residency
The Portuguese D7 Visa is designed for individuals who can demonstrate sufficient passive income (pension income, rental income or financial portfolio income) to support themselves in Portuguese territory.
Requirements include:
- Minimum monthly income of €915 (2025 minimum wage), plus 50% for a spouse and 30%.
- Proof of accommodation in Madeira (rental agreement or property deed)
- Valid private health insurance
- Portuguese Taxpayer Identification Number (tax number)
Once the Portuguese D7 visa is approved, you’ll enter Portugal and complete the residency process locally with AIMA (Asylum and Immigrants Agency). The initial residence permit is typically valid for two years and renewable thereafter, provided minimum staying requirements are met.
At MCS, our team of seasoned professionals handles the entire process for you—from reviewing your D7 application to registering your residence and navigating tax obligations—so you can focus on settling into island life.
Taxation for Retirees in Madeira (Post-NHR)
With the Non-Habitual Resident (NHR) regime officially phased out, British retirees in Madeira now fall under Portugal’s general personal income tax rules. While this means losing the 10% flat rate for pensions that NHR offered, the current system remains transparent and manageable—with thoughtful planning.
Key Tax Points for UK Pensioners in Madeira
As a Portuguese tax resident, you’ll be taxed on your worldwide income, including most UK pensions. Here’s what to expect under the current tax framework:
- Private pensions and annuities (e.g., from UK workplaces or personal pension schemes) are taxed progressively from 14.5% to 48%, depending on your income level.
- UK state pensions are also taxable in Portugal unless treaty provisions apply.
- UK government service pensions (e.g., civil service, police, military) remain taxable in the UK under the Portugal-UK tax treaty.
- Portugal does not levy a wealth or inheritance tax (though stamp duty may apply on gifts and inheritances of certain assets).
🔍 TIP: You may also be liable for a solidarity surcharge on income exceeding €80,000 (2.5% to 5%).
2025 Personal Income Tax Rates
- Up to €7,703: 14.5%
- €7,704 – €11,623: 23%
- €11,624 – €16,472: 26.5%
- €16,473 – €21,321: 28.5%
- €21,322 – €27,146: 35%
- €27,147 – €39,791: 37%
- €39,792 – €51,997: 43.5%
- €51,998 – €81,199: 45%
- Over €81,199: 48%
Healthcare and Insurance
Portugal is known in Europe to offer excellent healthcare, and Madeira is no exception. You’ll have access to SESRARAM, Madeira’s public health system, upon residency, provided certain conditions are met. However, many expats maintain private health insurance for faster service and English-speaking providers.
📌 Note: Private insurance is mandatory when applying for the D7 Visa.
Real Estate: Where to Live in Madeira?
Most retirees begin with long-term rentals to explore the municipalities they think they like most before committing to purchasing a villa or an apartment.
Popular retirement areas include:
- Funchal – the cosmopolitan capital with healthcare, dining, and social life
- Caniço – quieter, close to Funchal, and increasingly popular with expats
- Calheta and Ponta do Sol – these municipalities are perfect for retirement under the sun and nature lovers
Why Work with Madeira Corporate Services?
At MCS, we specialize in helping international clients retire, relocate, and invest in Madeira. With over 25 years of experience, we provide tailored support in the following areas:
- D7 Visa and residency applications
- Portuguese NIF and tax registration
- Ongoing personal income tax compliance
- Real estate acquisition and legal due diligence
- Health insurance and healthcare registration
- Estate and succession planning for UK nationals
With a native bilingual team and international experience, we take care of the details—so you can enjoy Madeira’s lifestyle without bureaucracy.
Ready to Begin Your Retirement in Madeira?
Retiring to Madeira from the UK is not just a dream—it’s a well-supported lifestyle shift. Despite the end of NHR, Portugal’s favourable environment, accessible healthcare, and established expat community make it one of Europe’s best choices for British retirees.
Contact Madeira Corporate Services today to begin your journey to Madeira. We’ll guide you through every step—visa to villa, taxes to tranquillity.
The founding of Madeira Corporate Services dates back to 1996. MCS started as a corporate service provider in the Madeira International Business Center and rapidly became a leading management company… Read more
