About to Buy Real Estate in Portugal as an Expat? Here’s why you should consider Madeira island for your property investment.
Tips & Reasons to Buy Real Estate in Portugal as an Expat
Year-Round Pleasant Climate
Madeira is known as the “Island of Eternal Spring” due to its year-round mild climate. This consistent meteorological pattern makes the archipelago appealing to expats (digital nomads or pensioners) seeking a comfortable permanent residence environment without dealing with the lack of modern infrastructure common in other archipelagos.
Thriving Expat Community
Madeira has a well-established and welcoming expat community whose historical roots date back to Madeira’s settlement in the 15th century. Today’s network and experienced tax and legal professionals provide newcomers with the support, social opportunities, and valuable insights they need to thrive in island living successfully.
Understanding Madeira’s Real Estate Market
Diverse Property Options
Madeira’s real estate market is very diverse, providing a range of properties for investors that include contemporary apartments in Funchal, the capital, as well as traditional Quintas located in the countryside and on Funchal’s outskirts; such real estate property diversity, which is unique among small island European archipelagos, enables investors to find a property that matches their needs and aligns with their budgeting, even Porto Santo island, located northeast of Madeira and famous for its arid climate, features lovely villas for sale.
Current Market Trends
Since the beginning of the COVID-19 pandemic, Madeira’s real estate market has been reflecting a steady demand because Madeira is considered a haven.
The most recent statistics show that as of 2025, the median price of an apartment stands at €4,122 per square meter, meaning that 50% of listed apartments are priced above this threshold, while the remaining half are listed at lower prices. This median value offers a reliable snapshot of the central pricing trend without being skewed by particularly high or low outliers.
For buyers prioritizing more living space—such as families or individuals seeking a garden or private outdoor area—houses represent a slightly more affordable option per square meter. As of 2025, the median house price in Madeira is €3,678 per square meter. These figures may vary significantly depending on the location within the island, property condition, views, and proximity to amenities such as schools, healthcare, and the coastline.
Although property values have increased, the archipelago is still more budget-friendly than other European locations, especially according to Central European and North American standards.
Buy Real Estate in Portugal as an Expat: Legal Considerations
Property Ownership Rights
Under the Portuguese Constitution, due to Article 13, foreigners are granted the same property ownership rights as citizens. Therefore, there are no restrictions on foreigners purchasing real estate property.
Residency and Visa Implications
Owning (in) direct property doesn’t automatically grant residency when filing for visa applications as proof of residence with the Portuguese consular authorities. Portugal offers various visa options, such as the D7 Passive Income Visa and the Golden Visa, which may suit property investors.
Step-by-Step Guide to Buying Property in Madeira as an Expat
- Engage a Reputable Real Estate Agent
- Explore Properties.
- Secure Legal and Tax Representation: Hire a lawyer and a certified accountant. The lawyer will conduct due diligence, ensuring the property has a clear title and no encumbrances; the accredited accountant, on the other hand, will assist you in understanding your potential tax liabilities and compliance concerning the income the property will generate in case of an investment property.
- Obtain a Fiscal Number (NIF): The tax identification number is required not only for property transactions but also for opening a bank account, hiring utilities, etc…
- Sign a Promissory Contract: This preliminary agreement, to be reviewed by the lawyer, outlines the terms of the sale and typically involves a deposit payment.
- Finalize the Deed (Escritura): The purchase deed is signed between the seller and the buyer before a notary, with the lawyer and a translator (if applicable), and the remaining balance due is paid. This step officiates the transfer of property.
Costs Associated with Buying Property in Madeira
When buying property in Portugal, Madeira included, several expenses will be involved, namely:
- Purchase expenses include the Property Transfer Tax (IMT), which varies depending on the property’s value and type, and the
- Stamp Duty is typically set at 0.8% of the property’s value.
- Notary and Registration Fees may vary and should be discussed with the lawyer.
- One ongoing tax is the Municipal Property Tax (IMI), due annually and based on the property’s taxable value.
To buy real estate in Portugal as an expat is relatively straightforward but requires patience and attention to detail. Ensure that all documents are correctly completed and submitted to avoid delays or legal issues down the line. Working with experienced professionals can help smooth the journey.
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
