Found the right home? Does the price fit your budget? What many people forget to factor in, and are then caught out by, are the costs that come on top of the asking price.
In Madeira, the taxes and notary costs of buying a property vary considerably depending on the buyer's profile. For a €300,000 home, the difference can range from zero euros, if you are under 35 and buying your first home, to almost €25,000, if you are a non-resident buying a second home or an investment, save for some exceptions*.
This guide explains, clearly and with real figures, what each type of buyer should expect when purchasing in the Autonomous Region of Madeira, so there are no surprises at the wrong moment.
Please note: the IMT figures in this article apply to properties located in the Autonomous Region of Madeira. Buyers on the Portuguese mainland should check the tables that apply there, which may differ.
1. IMT: the heaviest tax (and it depends on your profile)
IMT (Imposto Municipal sobre as Transmissões Onerosas de Imóveis, the property transfer tax) is the main tax on a property purchase. It is paid by the buyer before the deed is signed.
In the Autonomous Region of Madeira, IMT is calculated using the region's own tables. The amount depends directly on your buyer profile.
| Profile | IMT |
|---|---|
| Main permanent residence (resident in Portugal) | €7,927.55 |
| Second home (resident in Portugal) | €9,256.87 |
| Non-resident / investment (flat rate of 7.5%) | €22,500.00 |
| Young buyer aged 35 or under, first main residence | €0.00 |
Young buyers aged 35 or under: full exemption
If you are 35 or under, tax resident in Portugal and buying your first main permanent residence for up to €413,173.75, you pay no IMT.
Good to know: the exemption for young buyers has been one of the most significant measures of recent years to make home ownership more accessible. If you qualify, the impact on your budget is immediate and substantial.
2. Stamp duty: the same for almost everyone, zero for young buyers
Stamp duty (Imposto do Selo) is charged at 0.8% of the purchase price, whether you are a resident, a non-resident or buying a second home, and it is the same throughout Portugal, including Madeira.
For a €300,000 property: €2,400.00.
The only exception is a young buyer aged 35 or under who meets all the conditions above: in that case, stamp duty is also fully exempt.
If you take out a mortgage, stamp duty is also charged on the loan, calculated on the amount borrowed at rates that vary with the loan term. This comes on top of the purchase costs and should be included in your overall financial planning.
3. Deed and registration: the notary costs
The deed (escritura) is the formal act that transfers ownership into your name. The associated costs include:
- Notary fees: paid to the notary or the registry office.
- Land registration: recording the property in your name at the Land Registry (Conservatória do Registo Predial).
- Certificates and preparatory documents: an up-to-date property tax record (caderneta predial), land registry certificate and others.
In total, these costs usually range between €500 and €1,500, depending on the value of the property and the complexity of the process.
For young buyers who meet the exemption conditions, registration fees are also exempt, making the purchase considerably more affordable.
Please note: an energy performance certificate is mandatory for every sale. If the property you are buying does not have a valid certificate, it is the seller who must provide one before the deed. Check this at the very start of the process.
4. Mortgage: additional costs to consider
If you finance the purchase with a mortgage, there are additional costs linked to the bank process:
- Bank valuation of the property: usually between €150 and €300.
- Mandatory insurance: life insurance and multi-risk home insurance, required by the lending bank for the full term of the loan.
- Arrangement fee: varies from bank to bank.
- Stamp duty on the loan: calculated on the amount borrowed, at rates that vary with the loan term.
These amounts vary considerably between lenders. Comparing offers from different banks can mean significant savings over time.
5. IMI: the annual tax that stays with you
IMI (Imposto Municipal sobre Imóveis, the municipal property tax) is not a purchase cost, but it becomes a yearly expense as soon as you become the owner. It is calculated on the property's taxable value (VPT), which may differ from its market price.
Rates are set every year by each Madeira municipality, within the legal limits established by the State.
Good to know: for a main permanent residence, there may be a temporary IMI exemption in the first years after purchase, depending on the property's taxable value. Check your eligibility with the Tax Office (Finanças) or with your estate agent in Madeira.
Rule of thumb by profile
| Profile | Set aside around |
|---|---|
| Aged 35 or under, first main residence, tax resident Essentially just the deed and registration costs. It is the easiest route to home ownership currently available in Portugal. | €500 – €1,500 |
| Resident, main permanent residence | €11,000 – €12,000 |
| Resident, second home | €12,500 – €13,500 |
| Non-resident / investment | €25,000 – €26,500 |
Buying with clarity, not surprises
Knowing the real costs before you commit is not a luxury, it is the least every buyer deserves. At Predimed Madeira One, this is exactly what we do from the very first conversation: explain everything that is at stake, so every decision is made with information and confidence.
If you are planning to buy a home in Madeira and want to know, down to the cent, what it will cost in your particular case, get in touch. We will run the numbers with you, with no obligation.
Luís Rodrigues
Predimed Madeira One · Your home, our commitment.
We will run the numbers with you
+351 926 418 931 · predimed@madeiraone.pt · Edifício Canicentro Golden, Loja 22, Caniço.
* This article is for information purposes only and does not constitute legal, tax or financial advice. The rules described are subject to legislative change and apply specifically to properties located in the Autonomous Region of Madeira. For specific decisions, always consult a qualified professional.