Buying a house in Madeira

Are you considering buying a house in Madeira either for self-use or investment? Here is everything you need to know!

Article by Viv Europe - Official Legal and Relocation Partner to KipperTree.

August 26, 2022

Buying a house in Madeira should be at the top of your priority list if you’re considering moving permanently to this beautiful island. Madeira is one of the best places to live not only in Portugal but across the entire European region. This beautiful island is right in the heart of the Atlantic and has managed to have most things ex-pats are searching for. Living on this island means experiencing the combination of island life and also what families are looking for. Choosing to move and retire to Madeira might be the best decision you have made yet. 

You’ll get to enjoy a great climate and a relatively lower cost of living, not to mention the beautiful landscapes waiting to be explored. So can ex-pats buy a house in Madeira? Is it worth it to move to this part of Portugal? What documents do you need? This article is for you if you’re asking yourself such questions. Stick around to find out more!

Why should I think about buying a house in Madeira?

Getting a piece of this beautiful island is a dream come true for many people. Madeira is one of those places that, when you visit once, you will always want to visit again. There are plenty of reasons why different people from all over the world would like to buy a house in Madeira. 

For foreign investors, Madeira is one of the budding destinations that still has good real estate investment prospects for the near future. For the regular ex-pat, buying a house in Madeira might simply mean getting some peace of mind in a relatively small city in the Atlantic with plenty of sunshine. 

Nonetheless, here are some major reasons you should consider buying a house in Madeira.

Good real estate investment prospects

Portugal as a country has managed to do something almost unimaginable, especially after an economic crisis. 

The fact that it has taken close to 10 years for Portugal to recover economically and become one of the most sought-after destinations for foreign investors says a lot about the future of this nation. Almost everyone is trying to get a piece of this country; if fact, half of the properties purchased in 2020 were from foreign nationals. 

While the prices of properties have been rising for the last five years, it is worth mentioning that they are still at an acceptable level, even for foreign nationals. When it comes to real estate prices, Madeira offers relatively lower prices compared to cities like Lisbon and the Algarve. 

The Global Property Guide mentions that the average cost of property in the Algarve, Lisbon, and Madeira are €1,673, €1,659, and €1,286 per square meter, respectively. 

Good quality of life

If a casual and relaxing lifestyle sounds like something you’d like, then Madeira might be the right destination. This beautiful city gives you the rare opportunity of enjoying peace and calmness without necessarily losing access to modern city life. Generally, life in Madeira is slow-paced compared to other cities across Europe. 

The local population also welcomes foreign nationals, making integration and assimilation into the community relatively easier. Also, most properties in Madeira are either on the beach or close enough. What this means is that it’s possible for you to find yourself a house with the Atlantic Ocean as a view.

To enjoy the benefits of the Golden Visa Program 

The recent shake-up in the Golden Visa program in Portugal had many cities rendered ineligible for this program. Fortunately, Madeira remains to be among the few places that still grant the Golden Visa for foreign investors looking to set up shop in this region. 

For starters, the Golden Visa Program is an incentive to encourage foreign investors outside the EU to consider investing in Portugal with the promise of gaining Portuguese citizenship after five years. The reason for this strategic move is to redirect foreign investments away from the oversaturated regions within Portugal. 

How to buy a house in Madeira

Buying a house in Madeira is no different from any other nation worldwide. This process often requires you to fulfil and meet certain requirements, especially if you are an ex-pat. It’s also worth mentioning that you need to do proper due diligence before putting your hard-earned money on just any house. 

Madeira, like the rest of Portugal, has a lot of bureaucracies in the public system. Buying a house as an ex-pat will require you to handle plenty of paperwork that can be quite confusing for anyone new to the Portuguese public system. 

But this is not to scare you, though; the process is often straightforward with some help from professionals, for instance, Viv Europe. 

Remember, the lengthy process and a lot of paperwork are to ensure everything is done above board and protect the interests of both the seller and the buyer. 

Can a foreigner buy a house in Portugal?

Fortunately, buying property in Madeira is possible for foreign nationals with a clean criminal record. Portugal is among the few European nations that welcome foreign nationals with open arms. In fact, the Portuguese government has also gone the extra mile and provided tax incentives like the Non-Habitual Tax regime and the Golden Visa just to encourage qualified foreign investors into the country. The island of Madeira is a good place for ex-pats to purchase property for investment, personal use, or even retirement.

How can I buy a house in Madeira?

Well, if you have gotten this far, chances are buying a house in Madeira is important for you. So without wasting any more time, let’s break down the bureaucratic process. 

Research and choose your investment

Before going shopping around, the first order of business is to understand what you are looking for in a house. You can look for many housing options depending on what you want to use it for. If you’re looking for investment properties ideal for the tourism action during the summer, consider luxurious villas close to the beach. 

However, if you are looking for a forever home for your retirement, there are plenty of midrange housing that you can purchase without breaking the bank. Also, the cost of property varies from one region to the other. So depending on your budget, you might want to focus your search on specific regions that make perfect financial sense for you-. 

Prepare the paperwork

For a foreigner, you will need to gather some important documents before starting the process of buying a house. One of the necessary documents you will need to have is the NIF Number (Número de Identificação Fiscal). 

It’s relatively easy to obtain this document from the local tax office; your legal representative can also get it for you. Unlike EU residents, foreigners from other nations must have a residency permit to stay permanently in Madeira. Lastly, you should also have a valid identification document like a passport and proof of income. 

Visit the property in Madeira

It goes without saying that only you know what is best for your family; therefore, we recommend scheduling a visit to Madeira to inspect the house physically. While there are plenty of reliable websites that can do the inspection on your behalf, there are other additional benefits that you will get by being physically present. 

First, this is a perfect opportunity for you to meet the house owner and potentially strike out a better deal for the property. Moreover, if you are physically present, you’ll be able to tell if the neighbourhood is ideal for you, especially if you have a family and children. Lastly, you will be satisfied with the particular property if you have been there to validate the existence of the house.

Get your documents settled in Portugal

There are four key documents that you’ll need to have before securing the legitimacy of the legal process of buying a house in Madeira

Certificate of Land Registry (Certidão do Registo Predial): This document is obtained from the land registry and documents the current owner of the property prior to the sale.

The license of Use (Licença de Utilização) Obtained from the parish council of the respective house; this document clearly indicates the purpose of the said property.

Housing Technical File (Ficha Técnica de Habitação): This document highlights all the technical descriptions of the house. 

Building Book (Caderneta Predial): You will need this document to show that the property has been tax compliant. You can obtain this document from the local finance office. 

Transfer the payment and sign the deed

Once you are done with the paperwork, you’re one step away from becoming the newest homeowner in Madeira. However, before that, you will need to process the payment. Today, you don’t need to use the bank to wire transfer money. 

There are plenty of other fast and reliable options you can use depending on your location for ex-pats- out of the Eurozone.

Also, before sending money, do some due diligence on some of the best times to convert any currency to Euros. Once the payment is received, ownership of the property will be transferred to your name. Talk to a currency specialist

How much does it cost to buy property in Madeira? Read the full article here and get the inside information from Viv Europe.