British buyers know Madeira well, but they now buy it as non-EU nationals, and that changes more than the queue at passport control. Since Brexit, a UK owner can spend 90 days in any 180 in Madeira without a visa, pays Portugal’s non-resident tax rates, and still has HMRC to answer to on the same property. None of that makes Madeira harder to buy. It makes the planning matter more. This guide sets out the position for a UK-resident buyer looking at homes from EUR 2M, from the purchase to the will.
Days without a visa
Transfer taxes, non-resident
UK-Portugal double tax treaty
For long-term UK residents
Last updated: October 2026
By: Alexander Thornbury
What changed for British buyers after Brexit?
Your status, not your right to buy. Portugal places no restrictions on foreign buyers, so a British buyer can still purchase in Madeira exactly as before, on the same terms as a Portuguese citizen. What changed is everything around the purchase. British nationals are now third-country nationals in the EU, which caps visa-free time, removes the automatic right to live on the island, and puts you on Portugal’s non-resident tax rates unless and until you become resident.
Two other changes since 2023 matter as much as Brexit. Property no longer qualifies for Portugal’s golden visa, so buying in Madeira gives no residence right at any price. And the NHR tax regime, which drew many British retirees to Portugal, closed to newcomers in 2024. A lot of UK advice about Portugal predates both. Our international buyer’s guide to Madeira sets out the current market and rules.
How long can you stay?
Up to 90 days in any 180-day period across the Schengen area, which includes Madeira. Owning a property does not extend that. To stay longer, you need a national visa and then a residence permit, and for a British owner with pensions, investments or rental income the usual route is the D7, Portugal’s visa for people with regular passive income. Its income bar is pegged to the Portuguese minimum wage, EUR 920 a month on the mainland in 2026.
Count the days carefully, because the 90-day limit is shared across every Schengen country. Weeks in Mallorca or the Alps come out of the same allowance as weeks in Funchal. And remember the tax side: spend more than 183 days in Portugal in a 12-month period, or keep a Madeira home that looks like your habitual residence, and you can become Portuguese tax-resident. Our Madeira residency guide covers both tests.
| For a UK-resident buyer | The position |
|---|---|
| Time in Madeira | 90 days in any 180 without a visa; D7 to stay longer |
| Transfer taxes | 7.5% IMT plus 0.8% stamp duty |
| Annual tax in Portugal | IMI at 0.3% of VPT; AIMI above EUR 600,000 of VPT |
| On a sale | Portugal taxes half the gain; HMRC taxes it too, with credit |
| On death | No Portuguese stamp duty for close family; UK IHT for long-term UK residents |
What do you pay in Portugal?
As a non-resident, about 8.3% of the price to buy: EUR 166,000 on a EUR 2M home, from a flat 7.5% IMT and 0.8% stamp duty. Keep the receipts. For UK capital gains tax, costs of transfer count as incidental costs of acquisition under section 38 of the Taxation of Chargeable Gains Act 1992, so the IMT and stamp duty reduce the gain HMRC taxes when you sell. Each year, IMI runs at 0.3% of the tax office’s valuation, and AIMI applies only above EUR 600,000 of it per person.
If you let, Portugal charges a non-resident a flat 25% on residential rent, and Funchal no longer accepts new holiday lets in apartment buildings. On a sale, Portugal taxes half of the gain at its progressive rates. Our Madeira property tax guide works through each charge.
What does HMRC tax?
The same property, again, with relief for what Portugal has taken. A UK resident is taxed on worldwide income and gains, so rent from Madeira goes on your UK return, and a gain on sale is within UK capital gains tax, charged on residential property at 24%, or 18% within the basic-rate band. The UK-Portugal double tax treaty, which dates from 1968, lets Portugal tax income and gains from the property, and the UK then gives credit for the Portuguese tax paid on the same gain or income, up to the UK liability.
Inheritance tax is the larger point. From 6 April 2025, UK inheritance tax turns on long-term residence, not domicile: if you have been UK-resident for at least 10 of the last 20 tax years, your worldwide estate is in scope, including the Madeira home, at 40% above the GBP 325,000 nil-rate band. Portugal adds nothing for close family, because spouses, partners, children and parents are exempt from its 10% stamp duty on inheritance. So for most British families the tax on death is a UK question, and the planning should start there.
| Event | Portugal | United Kingdom |
|---|---|---|
| Rent | 25% flat on residential rent | Taxable for UK residents, credit for Portuguese tax |
| Sale | Half the gain at progressive rates | CGT 24% (18% basic band), credit for Portuguese tax |
| Death | 10% stamp duty; close family exempt | IHT 40% above GBP 325,000 for long-term UK residents |
How should a British buyer plan the succession?
With a will that deals with the Madeira property expressly. Portugal has forced-heirship rules that reserve part of an estate for close family, up to two-thirds where a spouse and children survive. A foreign national can avoid them by choosing the law of their nationality in a will under the EU Succession Regulation, which Portugal applies even to nationals of countries outside the EU. For a British national, that typically means the law of the part of the UK you are most closely connected with.
The choice should be written in, not assumed. Without it, the default rules look to your habitual residence, and for immovable property abroad the conflict rules of English law can point back to the law of the place where the property sits, which can bring Portuguese forced heirship back into play. A Portuguese will for the Madeira asset, or a UK will drafted with the Portuguese property in mind, helps close that gap. Ask your lawyer to make the choice of law explicit, and to align it with your UK inheritance tax planning.
How do you get there, and what about sterling?
Getting there is straightforward: direct flights run from London and several regional UK airports, and Madeira’s airport handled a record 5.4 million passengers in 2025. For a second-home owner who flies in often, the east of the island, close to the airport, and Funchal itself are the natural places to look. Our guide to Madeira’s prime areas compares them.
The quieter risk is currency. A sterling buyer paying in euros carries exchange-rate exposure between agreeing the price and paying the balance, and again on any future sale. Fixing the rate for the purchase, or holding euros in advance, is worth discussing before you sign the promissory contract, because that is when the deposit, and the price, become binding. Our step-by-step buying guide shows when each payment falls due. If you are torn between Madeira and the Mediterranean, our comparison with the Algarve and Mallorca may help.
Key takeaways
- British buyers can still buy freely, but as non-EU nationals with 90 days in any 180 and no residence right from owning.
- Transfer taxes are about 8.3% for a non-resident: 7.5% IMT plus 0.8% stamp duty.
- HMRC taxes Madeira rent and gains too, with credit under the UK-Portugal treaty; residential CGT is 24% (18% basic band).
- UK inheritance tax now turns on long-term residence: 10 of the last 20 tax years brings the worldwide estate, Madeira included, into scope.
- Portugal exempts close family from inheritance stamp duty, but a will choosing UK law is the guard against forced heirship.
- The NHR is closed to newcomers, so a move to Madeira should be planned on today’s rules, not old advice.
Frequently asked questions
Can British citizens still buy property in Madeira after Brexit?
Yes. Portugal places no restrictions on foreign buyers, so British citizens buy on the same terms as before. What changed is the right to stay and the tax status: British owners are now non-EU nationals and pay Portugal’s non-resident rates.
How long can a British owner stay in Madeira?
Up to 90 days in any 180-day period across the Schengen area, which includes Madeira. Owning property does not extend this. Longer stays need a national visa, usually the D7, and a residence permit.
Does buying in Madeira give a British buyer residency?
No. Property stopped qualifying for Portugal’s golden visa on 7 October 2023. The D7 visa is the usual route for British owners with regular passive income who want to live on the island.
What taxes does a UK buyer pay to buy in Madeira?
About 8.3% of the price as a non-resident: a flat 7.5% IMT and 0.8% stamp duty, both on the higher of the price and the tax office’s valuation. Legal and registration costs are extra.
Do I pay UK tax on rent from a Madeira property?
Yes, if you are UK-resident. Portugal charges a non-resident 25% on residential rent, and the UK taxes the same income with credit for the Portuguese tax under the double tax treaty.
How is a gain on a Madeira property taxed for a UK resident?
Portugal taxes half the gain at its progressive rates, with worldwide income setting the rate. HMRC charges capital gains tax on residential property at 24%, or 18% in the basic-rate band, with credit for the Portuguese tax.
Is a Madeira home subject to UK inheritance tax?
If you are a long-term UK resident, yes. From 6 April 2025 the test is UK residence in at least 10 of the last 20 tax years, which brings the worldwide estate into scope at 40% above GBP 325,000.
Will my children pay Portuguese inheritance tax?
No. Portugal has no inheritance tax as such, and spouses, partners, children and parents are exempt from the 10% stamp duty on inherited Portuguese assets.
Does Portuguese forced heirship apply to British owners?
It can, unless your will chooses the law of your nationality under the EU Succession Regulation. Without that choice, the default rules can bring Portuguese forced heirship to bear on the Madeira property.
Is the NHR regime still available to British retirees?
No. The NHR closed to newcomers in 2024. Its successor, IFICI, covers listed research, innovation and specialist work, not retirees or investment income. Madeira residents do pay income tax 30% below the mainland from 2026.
Are there direct flights from the UK to Madeira?
Yes, from London and several regional UK airports. Madeira’s airport handled a record 5.4 million passengers in 2025.
Sources
- Portal das Finanças – IMT Code, article 17, including the 7.5% non-resident rate added in 2026
- Diário da República – Decree-Law 97/2026 (IMT for non-residents)
- Portal das Finanças – IMI Code, article 112 (IMI rates)
- Portal das Finanças – IMI Code, article 135-F (AIMI rates)
- Portal das Finanças – IRS Code, article 43 (gains counted at 50%)
- Portal das Finanças – IRS Code, article 16 (tax residence)
- EUR-Lex – EU Succession Regulation 650/2012
- Diário da República – Law 56/2023 (end of the property golden visa)
- Jornal Oficial da Região Autónoma da Madeira – Despacho 19/2026, income-tax tables for 2026 with the 30% regional reduction
- ANA Aeroportos de Portugal – Madeira airport passes 5 million passengers in a year for the first time (2025)
- legislation.gov.uk – Taxation of Chargeable Gains Act 1992, section 38 (allowable costs)
- GOV.UK – capital gains tax on property, inheritance tax and long-term residence from April 2025, UK-Portugal double tax treaty
- Portuguese consular services – the D7 visa
Figures current at October 2026. UK and Portuguese tax rules change, often annually; confirm your position with a UK tax adviser and a Portuguese lawyer before you buy.
About the author
Alexander Thornbury is a published author who writes on international property, tax and residency for high-net-worth buyers across Europe. His work focuses on the practical mechanics of cross-border purchase: what a buyer actually pays, owes and signs. More at alexanderthornbury.com.