How to Buy Property in Madeira: 2025 Investment Guide
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Dreaming of your own home in Madeira? Imagine mornings with a cup of coffee on a terrace overlooking the Atlantic and afternoon walks along picturesque cliffs. Sounds tempting, doesn't it?
Madeira, known as "The Pearl of the Atlantic" and "Island of Eternal Spring," attracts not only tourists but also investors and those seeking their place on Earth. If you want to buy real estate in Madeira, you've come to the right place. In this article, you'll learn what the current prices are, how to safely buy an apartment in Madeira and what to particularly pay attention to during the property purchase process in Madeira.
Why is it worth buying property in Madeira?
Madeira is not just a paradise island with an ideal climate year-round. It is also a stable real estate market that attracts investors from around the world. Here are a few reasons why people fall in love with this island and decide to buy property in Madeira:
- Mild climate all year round – with temperatures around 20°C in winter, 25–30°C in summer (up to 32°C in July), without extreme heat or frost, making the island the ideal place for living and investment.
- Attractive property prices compared to other popular European destinations.
- Stable real estate market, which grows with the interest of tourists and investors.
- Safety and quality of life – residents of Madeira enjoy a peaceful, stress-free lifestyle.
- Possibility of obtaining a Golden Visa, allowing for legal residence in Portugal with specific investment conditions.
Top locations to invest in Madeira real estate in 2025 – where to invest?
Funchal Real Estate
The capital of Madeira, Funchal, is a prestigious location for those looking for luxury villas or modern apartments with ocean views. New developments, prestigious villas, and apartments are emerging near the beach.
Below you can see an example. Luxury villa for sale in Funchal with a stunning view of the sea and bay.
Below is an apartment with a sea view, a large pool, and a garden.
As the capital of Madeira, Funchal offers the highest potential for short-term rental. That's why our Globihome readers often choose Funchal when considering whether investing in Madeira real estate is worth it in 2025. Apartments in the city center or with ocean views maintain consistent interest from tourists and generate stable rental income year-round.
Caniço Real Estate
Caniço is a peaceful residential area that has become an ideal place for families. Property prices here are lower than in Funchal, but the area is developing dynamically, creating excellent investment prospects.
Ribeira Brava Real Estate
Ribeira Brava is a picturesque town attracting investors looking for luxurious residences with Atlantic views. It is a great location due to its proximity to Funchal and very good road connections. You can reach Funchal from Ribeira Brava by car in 22 minutes.
Ponta do Sol Real Estate
Ponta do Sol attracts clients seeking tranquility and spectacular views. It's a place where you can find villas with ocean views at much lower prices than in Funchal.
Calheta Real Estate
Calheta is one of the most popular places to live in Madeira. Here you will find beautiful beaches, modern amenities, and a peaceful lifestyle. The region attracts investors due to luxury apartments with ocean views, and also a stable rental market. Calheta is an excellent choice for both living and investment.
Property prices in Madeira in 2025 – apartments, houses, and plots
If you are planning to purchase property in Madeira, one of the first issues that probably interests you is the property price. At Globihome, together with real estate agents from Madeira, we regularly analyze the market to provide you with up-to-date data.
The minimum price of an apartment in Madeira obviously varies depending on several factors, such as location, size, condition of the property, infrastructure, but generally speaking, current prices in 2025 are:
- One-bedroom apartment starts from 200,000 EUR,
- Two-bedroom apartment starts from 250,000 EUR,
- Three-bedroom apartment starts from 350,000 EUR,
- Houses start from 250,000 EUR.
Below you will find a breakdown of real estate prices in Madeira in 2025.
Apartments for sale in Madeira - prices 2025
Apartment prices in Madeira start from 200,000 EUR for a small apartment in Funchal, and luxury apartments can cost up to 1,200,000 EUR.
- New apartments in Funchal city center: from 3500 EUR/m²
- Second-hand apartments in Funchal: from 2500 EUR/m²
- Apartments with ocean view (new): from 4000 EUR/m²
- Apartments with ocean view (used): from 3000 EUR/m²
Houses for sale in Madeira - prices 2025
In less touristic towns, house prices start from 250,000 EUR. Meanwhile, for luxury villas with ocean views, you need to pay at least 850,000 EUR.
- House prices in Funchal: from 500,000 EUR
- House prices in Ribeira Brava: from 400,000 EUR
- House prices in Ponta do Sol: from 400,000 EUR
- House prices in Calheta: from 400,000 EUR
- House prices in Caniço: from 350,000 EUR
Building plots on Madeira - prices 2025
Land prices in Madeira range from 50,000 EUR to 1,000,000 EUR depending on size and location.
We recognize that the spread of prices presented is large, so at the end of the article, we provide you with contact to a recommended real estate agent in Madeira. This is an agent verified by us who will present you with property offers tailored to your needs.
How to safely buy property in Madeira in 2025? – A step-by-step guide
1. Determine the type of property
Think about what type of property you are looking for. Are you dreaming of a modern apartment in Funchal with an ocean view, or maybe a quiet house in the suburbs of Madeira? Or perhaps you are interested in a building plot where you can build your dream home? Consider whether you see the purchase of property in Madeira as an investment or a place for permanent residence.
2. Set your budget
An equally important step is setting a budget. Apart from the price of the property itself include additional costs, such as taxes, notary and registration fees, and potential renovation or finishing costs. If you plan to purchase with a loan, it is worth checking your financial possibilities and consulting with a credit advisor in advance.
3. Find a local real estate agent in Madeira
Professional agents will help you find the best properties for sale in Madeira, guide you through the purchase process, and take care of the formalities. From our experience, it is best to collaborate with an agent who lives in Madeira daily and has been serving clients for at least a few years. Such agents often have access to offers not available online. Additionally, they have verified contacts to notaries, lawyers, renovation companies, and property management agencies.
If you are a professional real estate agent anywhere in the world, contact us. Together, we will create the best article for Globihome blog readers. You can find details under the collaboration section.
4. What are the legal requirements for buying a home in Madeira?
To buy a property in Madeira, you need to obtain a Portuguese tax identification number (NIF), which is necessary for conducting financial transactions. This can be done personally at the tax office (Finanças) or through a proxy. Obtaining an NIF is free.
The next step is to open a local bank account, which will facilitate payments related to the purchase. Most Portuguese banks offer accounts also for foreigners.
5. Verify selected properties
If you are wondering how to safely buy an apartment, house, or plot in Madeira, before signing any agreement, make sure the property is not burdened with debts. Also check its legal status and compliance with current regulations. It is worth cooperating with a local notary and real estate agent who will assist you in these aspects.
6. Sign a preliminary agreement and pay a deposit
The standard deposit is between 10% of the property's value. This secures the transaction against any party withdrawing. It is worth signing a preliminary agreement, especially if you want to buy a property with a loan. Such an agreement is needed for the bank to verify your creditworthiness.
7. Finalize the transaction with a notary
After signing the final sale agreement, the property is registered in your name. Congratulations – you have just become a property owner in Madeira!
What documents are needed to purchase property in Madeira?
Purchasing property in Madeira requires preparing several key documents. Below we present a list of the most important ones you need to prepare:
- Tax identification number (NIF) – is necessary for any financial transaction in Portugal. You can obtain it at the tax office (Finanças) or through a proxy.
- Identity document – passport or ID card confirming your identity.
- Preliminary agreement (Contrato de Promessa de Compra e Venda) – document specifying transaction terms and securing purchase through a deposit.
- Permanent Certificate (Property Register Excerpt) – confirms the property is free from debts and mortgages.
- Caderneta Predial (Cadastre Document) – contains information about the property's location and cadastral value.
- Portuguese bank account number – required for payments related to the purchase and maintenance of the property.
With proper documentation preparation, the purchase process proceeds smoothly and without issues.
What are the taxes and costs when purchasing property in Madeira?
Purchasing property is not just the purchase price, but also additional fees to consider in your budget. In Portugal, there are three main taxes related to property purchase: IMT, Imposto do Selo and IMI. Understanding these fees will help avoid surprises and better plan your investment.
- IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis) – a one-time tax on property ownership transfer. Its value depends on the property value and ranges between 0.8% and 8%.
- Imposto do Selo (Stamp Duty) – it is 0.8% of the property's value and is mandatory for every transaction.
- IMI (Imposto Municipal sobre Imóveis) – an annual property ownership tax, ranging from 0.3% to 0.45%.
Besides taxes, you need to remember additional costs, including notary costs, document translation fees, and obtaining a tax identification number (NIF). Additional costs amount to approximately 1% of the property's value.
Return on Investment in Madeira Real Estate 2025
Investment in a property in Madeira for short-term rental can bring attractive profits. According to our statistics at Globihome, the average occupancy during the season is around 75-85%. This means a potential annual return on investment of 5-10%. However, remember about management costs, which typically account for 15-20% of revenue.
Calculating the exact return on investment in Madeira real estate is worth considering based on the example of the apartment you want to buy. We recommend direct contact with a real estate agent for this purpose.
FAQ - Frequently Asked Questions about buying real estate in Madeira
Can foreigners buy real estate in Madeira?
Yes, foreigners can freely buy properties in Madeira. The only formal requirement is obtaining a Portuguese tax identification number (NIF) and opening a bank account in Portugal.
What are the current real estate prices in Madeira in 2025?
Property prices in Madeira in 2025 vary depending on location, type, and size. Small apartments can be purchased from 200,000 EUR, while house prices start at 250,000 EUR. Luxury villas cost at least 850,000 EUR.
What are the best locations for real estate investments in Madeira?
The most attractive location for investors is Funchal, the capital of Madeira, where short-term rental is in high demand. Caniço is a quieter residential district, perfect for families, and Ribeira Brava, Ponta do Sol, and Calheta attract those seeking luxury properties with ocean views.
What are the transaction costs when purchasing property in Madeira?
In addition to the property price, buyers must consider additional costs, including the property transfer tax (IMT), which ranges from 0.8% to 8% of the property's value, the stamp duty (Imposto do Selo) at 0.8%, and the annual property tax (IMI) ranging from 0.3% to 0.45%. Additionally, there are notarial and registration costs, which account for about 1% of the property's value.
Can property in Madeira be purchased remotely?
Yes, purchasing property in Madeira can be conducted remotely. It is possible to grant power of attorney to someone who will complete all formalities on your behalf.
Can I obtain a mortgage in Portugal?
Yes, Portuguese banks offer mortgage loans to foreigners.
How much does property insurance cost in Madeira?
The cost of property insurance in Madeira depends on its value and coverage scope, but the average annual premium ranges from 200 to 600 EUR.
What are the maintenance costs of a property in Madeira?
Average monthly rent ranges from 70 EUR to 1000 EUR. Additionally, the property tax (IMI), ranging from 0.3% to 0.45% of the property's value annually, should be considered. Utility costs, such as electricity, water, and internet, add up to around 80-150 EUR per month.
What is the weather like in Madeira?
In winter, the temperature is around 20°C during the day, and nights are warm – the temperature rarely drops below 16°C. In summer, temperatures range between 25°C and 30°C, and in the warmest month, July, they can reach 32°C. Thanks to the cooling influence of the Atlantic, the island does not experience heatwaves or frosts, making it an ideal place for living and real estate investments.
Summary and key information about buying property in Madeira:
- Stable real estate market – Madeira is an attractive investment location.
- Property prices – apartments from 200,000 EUR, houses from 250,000 EUR.
- Purchase process – requires obtaining an NIF and collaborating with a notary.
- Taxes and related costs – IMT (0.8-8%), IMI (0.3-0.45%), notary fees.
- Financing – mortgage loans available for foreigners.
- Rental – possibility to earn 5-10% of the property's value annually.
Purchasing property in Madeira is an excellent investment for both private individuals and investors. If you want to receive personalized offers for houses for sale in Madeira or plan to invest in an apartment for sale in Madeira, contact a recommended real estate agent for free.