There is a wide availability of properties for sale and rental in Madeira. Resorting to real estate agents is the most convenient way of obtaining detailed information and assistance. It is also very common to find property advertised in the local newspapers.
There are no restrictions on the acquisition of real estate by foreigners. The purchase of property generally involves a Promise of Sale and Purchase Contract, which although not mandatory by law, is usually adopted as a security measure for both parties involved in the transaction. The agreed terms and conditions of the transaction are laid down in the contract and generally a deposit payment is made.
The deed of sale is a private document signed by the parties in front of a notary office, a lawyer, a solicitor or a chamber of commerce for legal authentication. At this time the final payment is usually made. The original document will remain with the entity which legally recognized it, and another copy is registered with the Public Records office. The purchaser requests a certified copy to prove ownership in applying for the connection of utilities, etc.
The buyer of the property must register the purchase at any Portuguese Property Registry Office within the following 10 days and at the respective Tax Office with the purpose of establishing the annual property taxes, which are based on the property's estimated value.
Companies operating in the IBC of Madeira will be exempt from tax on the transfer of property, death and legacy duties due on the acquisition of immovable property for their establishment.
If the purchase involves a bank loan, it will generally be approved through a mortgage on the property which will be registered simultaneously with the property registration.
Taxes, fees and other costs
Property in Portugal is subject to two different taxes: the Municipal Transaction Tax (IMT), payable on the moment of transmission of ownership of the property, and the Municipal Property Tax (IMI) payable annually.
The IMT tax is applied on the transaction price or on the Taxable Value of the property (calculated by the tax authorities), whichever is higher. The tax rate will vary according to the type and value of the property ranging from 0% to 8% for urban property for residential use (villas and apartments). Urban property not used for residential purposes, such as plots of land for construction, office spaces and other commercial property will be generally taxed at the rate of 6,5% of the purchase price or Taxable Value. Property purchased for the set up of IBC companies will be exempt from IMT.
The IMI tax is due annually and is applicable on the Taxable Value of the Property. The tax rate is set by the local Council and depends on the type of property. Notary and registration fees are due, respectively, on the date of the deed of sale and on the date of the registration of the property.
Generally speaking, property for rent normally refers to furnished apartments located in the center or around Funchal. After all the conditions such as the monthly rent and rental period are agreed by the parties, a written contract will be signed. The property must be duly licensed for residential purposes by the local Council and that license must be evidenced in the renting contract.
The contract must not exceed 30 years in duration. When the contracting parties do not determine the contract duration, it will be deemed to be celebrated for a minimum period of 2 years.
The landlord will be responsible for all the conservation works and, unless otherwise stipulated in the contract, also for the expenses related to common areas in the case of condominiums. On the other hand, the tenant will be responsible for the payment of all expenses related to services supplied, such as water, energy and gas connections. It is always advisable to resort to the legal support of a local lawyer, either on the purchase or rental of property.
The costs of housing in Madeira may vary according to the location and type of property. As a reference, the rent of a 2 bedroom apartment will be approximately 750€ per month in the centre of Funchal and 650€ in the outskirts. The rent of a 3 bedroom apartment will cost approximately 850€ and 750€, respectively, in the centre and outskirts of Funchal. All these costs refer to furnished apartments.
The cost of purchase of a 4 bedroom apartment in a residential area in Funchal will cost between 200.000€ and 300.000€.
Real Estate Agents
AT&T - Sociedade de Mediação Imobiliária, Lda.
Conj. Monumental do Infante, loja 218, Avenida Arriaga, 9000-060 Funchal
EFEBÊ - Investimentos Imobiliários, Lda.
Rua 31 de Janeiro, 87 - 1 N, Edifício Ponte Nova, 9050-011 Funchal
ERA Madeira - Sociedade de Mediação Imobiliária, Lda.
Rua Alto do Pico, 18, Edf. Colina da Achada, Loja BP, 9000-028 Funchal
FUTURMAD - Sociedade de Mediação Imobiliária, Lda.
Rua Conde Canavial, 18 A, 9000-024 Funchal
Property Registry Office of Funchal
Edf. 2000, Avenida Calouste Gulbenkian