1. Engage a trustworthy real estate agent
To ensure a smooth property purchase in Madeira as a foreigner, having a reliable local expert by your side is essential. A reputable real estate agent can guide you through the local market, assist with legal aspects, and negotiate favorable deals. Seek out professionals with experience in dealing with international buyers and a solid reputation within the community. Prior to hiring, request references and verify their credentials.
2. Property Ownership for Foreigners in Madeira, Portugal
Foreigners, regardless of nationality, can purchase property in Madeira as long as they have a clean criminal record. European nationals can reside permanently on the island without specific authorization. In the past, non-Europeans seeking permanent residency were required to invest a minimum of €500,000 in a Madeira property, adhere to regulations, and apply for the Golden Visa Program. However, with the recent abolishment of the Golden Visa program, best to obtain a Specialist Immigration Advisor for further information. Madeira's appeal as a property investment destination lies in its mild subtropical climate, rich culture, year-round festivities, and relaxed lifestyle. Development on the island is restricted, preserving a significant portion of land under UNESCO World Heritage protection.
3. Cost of Living in Madeira
Properties in Madeira cater to diverse lifestyles and budgets. Whether you're looking for a modest one-bedroom apartment for under €100,000 or a luxurious villa exceeding €1 million, the island offers a range of options to suit various preferences.
Is Madeira Expensive?
Madeira is not a budget-friendly destination. Located in the middle of the Atlantic Ocean, air travel is the primary means of reaching the island, which can result in expensive flight costs depending on your departure location. For a comparison of costs relative to your current residence, visit www.numbeo.com.
3 Challenges of Purchasing Property in Madeira:
- Buying a villa or apartment in a bankrupt condominium under Sectional Title can diminish the property's market value and lead to high condominium fees and other issues.
- Madeira features diverse micro-climates, making location crucial. While purchasing a stunning sea view property in the summer seems ideal, it's essential to ensure full disclosure, as winter days may bring fog that was not previously mentioned.
- In some countries, property deposits are considered the buyer's funds until the final deed is completed. These deposits, along with accrued interest, are typically held in Trust accounts that are audited annually and protected by law. However, in Madeira, different practices apply, and irrevocable bank guarantees are not the standard for deposits.
While there are numerous pitfalls to consider, if you are serious about purchasing property in Madeira, reach out to us to avoid further challenges. We are here to assist you and highlight the many advantages of investing in Madeira.
Purchasing Costs and Advice
When buying property in Madeira Island, it's crucial to collaborate with brokers well-versed in Madeira's specifics and the legal aspects of property acquisition. With our extensive experience in the Madeira Real Estate market, we will support you throughout the buying process, whether you're interested in property in Funchal, Calheta, Ajuda, or Garajau. Here's how we can assist you:
- Negotiate prices, terms, and conditions on your behalf.
- Manage the necessary documentation, typically prepared by a licensed attorney.
- Oversee the acquisition of the essential fiscal number from the local tax office, a prerequisite before making an offer, facilitated by a licensed attorney.
- Provide a comprehensive breakdown of all expenses and charges, covering lawyer and Notary fees, taxes, and more.
- Property Purchase Taxes: We will help you comprehend the taxes associated with purchasing Madeira Real Estate.
- IMT: This one-time payment to the Portuguese State is due just before the final deed. Properties valued up to 115,000 euros are exempt from tax. For properties exceeding 115,000 euros, the tax increases on a graduated scale, reaching a maximum of 6% for properties over 700,000 euros, while land purchases incur a fixed rate of 6.5%.
Municipality Tax: An annual tax for municipal services, like waste collection, road maintenance, and schools, is calculated based on your property's ratable value and a percentage tax rate. These rates, determined by the local municipality, typically range from 0.3% to 0.35% of the ratable value.
When purchasing property in Madeira Island, you will need various documents, including:
- A preliminary contract detailing the sale terms, usually requiring a 10% deposit.
- A Land Registration Certificate providing the property's legal history.
- A Fiscal Certificate identifying the property by its unique tax number, description, owner details, and tax number.
- A Utility License confirming the property's approved use for residential or commercial purposes.
A Title Deed, signed by both parties at a Public Notary Office, ensuring all conditions of the initial Promissory Contract are fulfilled, all legal aspects are in order, the necessary purchase taxes are paid, and all parties agree to the transaction terms.
Best Location to Purchase Property in Madeira
The southern region of Madeira tends to be more favored over the northern part of the island. Typically, rural properties are priced more affordably compared to properties near Funchal, the capital of Madeira. Popular choices among international buyers include Caniço de Baixo, Garajau, and the southern coastline, as well as areas like Sé city centre, the Casino district, Lido tourist spots, Ajuda, São Martinho, The Forum Madeira, and the emerging Dubai-inspired region of Madeira. For those seeking historic charm, the old town is particularly appealing, although renovation may be required in areas like São Gonçalo and Santa Maria Maior.
Let Us Assist You Throughout the Property Purchase Process!
Tony Nobrega is equipped with the advice, details, and insights necessary for buying property on Madeira Island. Allow him to simplify the property buying experience on Madeira Island. Consult with him to find your ideal home in Madeira that suits your lifestyle requirements. Contact Tony for further assistance.