Buying in Madeira follows Portuguese law, and the law is friendlier to foreign buyers than most. There are no restrictions on who can buy. The process runs in two stages, a binding promissory contract and then the deed, and both transfer taxes are paid before you sign the second. What catches international buyers out is rarely the law. It is the paperwork that has to exist before anything else can happen, and the checks a steep island makes more important than a flat coast. This guide takes you through it in order, for an international buyer purchasing from EUR 2M.
On foreign buyers
Promissory contract, then deed
IMT and stamp duty before signing
Portuguese civil and tax law
Last updated: October 2026
By: Alexander Thornbury
Can foreigners buy in Madeira?
Yes, freely. Portugal places no restrictions on foreign buyers, whether they come from inside the EU or outside it, and foreigners own property on the same terms as Portuguese citizens. Madeira is an Autonomous Region of Portugal, so national property law applies on the island exactly as it does in Lisbon. That is a real difference from markets that cap or license foreign ownership.
Buying a home does not bring the right to live there, though. That has been the position since property left Portugal’s golden visa on 7 October 2023, and it is the most common misunderstanding among first-time buyers. Our Madeira residency guide sets out what does give you the right to stay, and our international buyer’s guide to Madeira covers the market as a whole.
What do you need before you start?
A Portuguese tax number, the NIF, comes first. Nothing else in the process, from the promissory contract to the tax payments, can happen without one. EU residents can obtain it directly. Non-residents living outside the EU used to need a Portuguese tax representative for it; since July 2022 they can instead sign up to the tax authority’s electronic notifications and dispense with the representative. A lawyer will usually arrange the NIF as part of the instruction.
Two other things are worth starting early. A Portuguese bank account makes the payments and the running costs simpler. And expect detailed source-of-funds checks from the bank, the lawyer and the agent under anti-money-laundering rules: proof of where the purchase money comes from, and how it reached you. That applies to every buyer, and having the documents ready saves weeks. Our corridor guides cover the home-country side of the move, including for buyers from the UK, the US and Ukraine.
What are the steps, in order?
Six stages, and the promissory contract is the one that matters most. After agreeing a price, your lawyer runs the checks on the property’s registration, tax record and licences. If they come back clean, buyer and seller sign the contrato-promessa de compra e venda, the promissory contract, and the buyer pays a deposit. The transfer taxes are then paid, and the sale completes with the escritura, the deed, signed before a notary or through the state’s Casa Pronta service. The new owner is then entered at the land registry.
| Stage | What happens | Who leads it |
|---|---|---|
| 1. NIF and instruction | Tax number obtained; lawyer appointed; funds evidenced | Buyer and lawyer |
| 2. Due diligence | Land registry, tax record, licences, survey | Lawyer and surveyor |
| 3. Promissory contract | Binding contract signed; deposit paid | Both lawyers |
| 4. Taxes | IMT and stamp duty paid | Buyer, via the lawyer |
| 5. Deed | Escritura signed; balance paid | Notary or Casa Pronta |
| 6. Registration | New owner entered on the title | Land registry |
How does the promissory contract protect you?
Through the deposit, which works in both directions. Under article 442 of the Portuguese Civil Code, if the buyer walks away, the seller keeps the deposit. If the seller walks away, the buyer can claim back double what was paid. Portuguese courts apply that only to a definitive failure to complete, not to a short delay, so the contract should set the completion date and conditions clearly. The size of the deposit is a matter of negotiation, not law.
This is why the order matters. Once you have signed the promissory contract, the deposit is at stake, so everything you need to know about the property should be known before you sign it, not after. A good promissory contract also records the conditions of the sale: the documents the seller will deliver, the state the property must be in, and what happens if a licence or registration problem appears.
What should due diligence cover?
Paperwork first. The certidão permanente from the land registry shows who owns the property, how it is described and whether any mortgage or charge sits on it; it can be ordered online. The caderneta predial, the tax record, gives the VPT that sets your IMI and any AIMI. Your lawyer should also check the licence of use, the energy certificate and, for homes built or remodelled since 2004, the technical file, because a property with missing or mismatched paperwork can be hard to insure, finance or sell later.
Then the island itself. Madeira is steep volcanic terrain, and the survey brief should reflect it: slope stability, retaining walls, drainage and access roads. A wildfire in August 2024 burned more than 5,000 hectares in the mountains above the south coast, so fire exposure belongs in the brief and in the insurance quote. If you plan to let, confirm the holiday-let position for the specific address. Funchal no longer accepts new holiday-let registrations in apartment buildings, under a regulation published in June 2026. Our guide to Madeira’s prime areas looks at how these factors vary along the coast.
What do you pay, and when?
The two transfer taxes are paid before the deed, not after. A non-resident buying a home pays IMT at a flat 7.5% from the first euro, with none of the usual exemptions or reductions, and stamp duty at 0.8%. Both are charged on the higher of the price and the VPT. Part of the IMT is refunded if you become tax-resident in Portugal within two years, or let the home at a moderate rent for 36 months of the first five years. Our Madeira property tax guide works through the figures at different price points.
On top come the costs of the transaction itself. Notary or Casa Pronta and land-registry fees are modest. Lawyers’ fees are agreed in advance and are often quoted at around 1% of the price, though that is a market estimate rather than a rule. In Portugal the estate agent’s commission is customarily paid by the seller. After completion, IMI arrives each year for whoever owns the property on 1 January.
| Cost | Rate or level | When |
|---|---|---|
| IMT, non-resident | 7.5% flat | Before the deed |
| Stamp duty | 0.8% | Before the deed |
| Lawyer | Agreed fee; often around 1% (estimate) | By agreement |
| Notary and registry | Modest fixed fees | At the deed |
| Agent’s commission | Customarily paid by the seller | At completion |
Key takeaways
- Foreigners buy freely in Madeira, on the same terms as Portuguese citizens, under national law.
- Get the NIF first; non-EU non-residents can use electronic notifications instead of a tax representative.
- The promissory contract is the binding moment: the buyer loses the deposit on default, the seller repays double.
- Check the registry certificate, tax record and licences before you sign, and brief the surveyor on slope, drainage and fire.
- IMT and stamp duty are paid before the deed: about 8.3% for a non-resident buying a home.
- The seller customarily pays the agent; the buyer pays the lawyer, notary and registry.
Frequently asked questions
Are there restrictions on foreigners buying property in Madeira?
No. Portugal places no restrictions on foreign buyers, from the EU or elsewhere, and they own property on the same terms as Portuguese citizens. Madeira follows national property law.
Do I need a Portuguese tax number to buy in Madeira?
Yes. The NIF is needed before you can sign the promissory contract or pay the transfer taxes. Non-residents outside the EU can sign up to electronic notifications from the tax authority instead of appointing a tax representative.
What is a contrato-promessa?
The promissory contract of purchase and sale. It binds buyer and seller to complete on agreed terms and is usually signed with a deposit. It is the moment the buyer’s money is first at risk.
What happens to my deposit if the sale falls through?
Under article 442 of the Civil Code, a buyer who definitively fails to complete loses the deposit, and a seller who does so must repay double. A short delay does not trigger either rule, so set clear dates in the contract.
How large is the deposit on a Madeira purchase?
It is negotiated between the parties; the law does not fix it. Whatever the amount, it is at risk once the promissory contract is signed, so finish the due diligence first.
What documents should my lawyer check?
The land-registry certificate (certidão permanente), the tax record (caderneta predial) with the VPT, the licence of use, the energy certificate and, for homes built or remodelled since 2004, the technical file. Missing or mismatched paperwork can make a property hard to insure, finance or sell.
Who pays the estate agent in Madeira?
The seller, by custom. The buyer pays the transfer taxes, the lawyer, and the notary and registry fees.
When are IMT and stamp duty paid?
Before the deed is signed. A non-resident buying a home pays IMT at a flat 7.5% and stamp duty at 0.8%, both on the higher of the price and the VPT. Part of the IMT can be refunded in two cases.
Where is the deed signed?
Before a notary, or through the state’s Casa Pronta service. The new owner is then registered at the land registry, which completes the transfer of title.
What should a survey cover in Madeira?
Slope stability, retaining walls, drainage and access roads, given the steep volcanic terrain, and fire exposure after the August 2024 wildfire burned more than 5,000 hectares. Share the findings with your insurer before you buy.
Can I buy a Madeira property to let as a holiday rental?
Only where the municipality allows it. Each council now sets its own holiday-let rules, and since June 2026 Funchal has barred new registrations in apartment buildings. Confirm the position for the address before you sign.
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)
- Diário da República – Stamp Duty Code and General Table (0.8% on purchase, 10% on inheritance)
- Diário da República – Civil Code, article 442 (deposits)
- Diário da República – Law 56/2023 (end of the property golden visa)
- Diário da República – Regulamento 787/2026, Funchal’s holiday-let regulation
- Predial Online – land-registry certificate (certidão permanente)
- Portal das Finanças – electronic notifications for non-residents
- Casa Pronta – state service for property transactions
- European Forest Fire Information System (Copernicus) – Madeira, August 2024
- Supremo Tribunal de Justiça – case law on deposits in promissory contracts
Figures current at October 2026. Confirm the process and costs for your purchase with an independent Portuguese lawyer.
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.