If you’re captivated by the stunning beauty of Madeira and want to buy property in Madeira, it’s important to navigate the process with care and expert guidance. Purchasing property in a foreign country like Portugal involves unique legal and financial considerations. In this guide, we’ll walk you through five essential steps to help you confidently buy property in Madeira and make a smart investment.
1. Hire a Specialized Real Estate Lawyer in Madeira
The first crucial step when buying property in Madeira is hiring a specialized real estate lawyer. Navigating the Portuguese legal system can be complex, especially for foreign buyers. A lawyer with expertise in Portuguese and Madeiran property law will provide invaluable guidance and representation throughout the buying process.
At MCS, we offer a team of English-speaking lawyers with extensive experience assisting expat clients in buying property in Madeira. Our experts will ensure that your property acquisition follows all legal requirements, helping you avoid any potential pitfalls.
2. Obtain a Portuguese Taxpayer Identification Number (NIF)
Before you can proceed with purchasing property in Madeira, you’ll need to obtain a Portuguese Taxpayer Identification Number (NIF), also known as “Número de Identificação Fiscal.” This is essential for any legal or financial transactions in Portugal, including buying property in Madeira.
Working with a certified accountant to guide you through the NIF application process is advisable. They will analyze your personal situation, including whether the property is intended as a vacation home or a permanent residence, your marital status, and whether other family members also need an NIF. You may also need to appoint a Portuguese tax representative if you reside outside the European Union.
Having a professional guide you through obtaining an NIF will ensure you fully comply with Portuguese tax laws when buying property in Madeira.
3. Conduct Comprehensive Due Diligence
Performing thorough due diligence is critical when buying property in Madeira. This involves reviewing the property’s legal and technical aspects to identify any potential risks.
On the legal side, you’ll want to review key documents, such as the Property Registration Certificate (“Certidão do Registo Predial do Imóvel”), Fiscal Property Identification Document (“Caderneta Predial”), and Occupancy License (“Licença de Utilização”). You’ll also need to check the Municipal Master Plan (“Plano Director Municipal”) and the Technical Data Sheet of the Property (“Ficha Técnica de Habitação”).
For technical due diligence, consider hiring a chartered architect or engineer to evaluate the property’s structural integrity and ensure any renovations comply with local regulations. This step can help you avoid unpleasant surprises and make informed decisions when buying property in Madeira.
4. Sign a Promissory Contract of Purchase and Sale (CPCV)
Once you’ve completed due diligence and are ready to move forward, the next step in buying property in Madeira is signing a Promissory Contract of Purchase and Sale (CPCV). This legally binding document outlines the terms and conditions of the property sale, including the agreed purchase price and payment schedule.
You’ll typically make a down payment at this stage, usually around 10% of the property’s value. The CPCV ensures that both the buyer and seller are committed to the transaction. If the seller withdraws, the buyer is entitled to double the deposit, while the buyer forfeits their deposit if they back out of the deal. Signing this contract offers legal protection and ensures the property purchase in Madeira proceeds smoothly.
5. Finalize the Public Deed of Purchase and Sale
The final step in buying property in Madeira is completing the Public Deed of Purchase and Sale. This official contract, prepared by your lawyer, is signed before a notary. The notary verifies all necessary documentation, ensures the agreed payment is made, and registers the property under your name with the Portuguese Land Registry.
At this point, you’ll also be responsible for paying the Municipal Property Transfer Tax (IMT) based on the property’s value. The notary will register the property on your behalf and finalize your property purchase in Madeira.
If you’re considering purchasing through a trust, foundation, or company, MCS can assist you with a tailored tax analysis to ensure the most efficient transaction structure.
Conclusion
Buying property in Madeira can be a highly rewarding experience, but it’s essential to approach the process with careful planning and expert advice. You can confidently navigate the property buying process by hiring a specialized real estate lawyer, obtaining a Portuguese NIF, conducting thorough due diligence, signing a Promissory Contract of Purchase and Sale, and finalizing the Public Deed.
At MCS, we specialize in helping expats and foreign investors easily buy property in Madeira. Our team of experienced lawyers and accountants is here to guide you every step of the way, ensuring a smooth and secure investment.
Contact us today to begin your journey toward owning a property in Madeira.
The information in this article on “buy property in Madeira” is for general informational purposes only and is not intended to constitute legal advice. While every effort has been made to ensure the accuracy of the content, laws and legal procedures can change, and the specifics of each case can vary widely. Therefore, readers are advised to consult a qualified professional or attorney in Portugal for advice tailored to their circumstances before taking action. This article does not create an attorney-client relationship between the reader, the authors, or the publishers. The authors and publishers are not liable for any actions taken or not taken based on the content of this article.
Ambrosio Jardim has, since 1998, worked mainly in the areas of commercial law (corporate, mergers and acquisitions, joint ventures, restructuring and planning), national and international tax law and real estate…. Read more
