São Martinho · €350,000
| Item | Amount |
|---|---|
| Equity | €105,000 (30%) |
| Mortgage | €245,000 (70%) |
| Purchase costs (~10%) | ~€35,000 (IMT+IS+notary) |
| Loan-to-value | 70% LTV |
| Example payment (25 yrs, 3.65%) | ~€1,245/month |
| Bank type | Major Portuguese bank · Funchal |
Region focus · Portugal · Madeira · §34i
Buy property in Madeira: what tax applies and how much a bank will lend
Madeira property sits in an autonomous region of Portugal with its own tax rates. Funchal and the south coast, year-round climate 18–25 °C. Up to 80% loan-to-value for non-residents.
How is transfer tax calculated when you buy property on Madeira?
On Madeira, Portugal's IMT applies, plus stamp duty (Imposto do Selo) of 0.8%. For non-residents, a flat IMT rate of 7.5% has replaced the progressive scale since 25 May 2026 (Decreto-Lei 97/2026), with a refund option upon later tax residence or moderate letting. The bank finances the purchase price, not IMT and incidental costs. As of 07/2026.
Not every bank lends against income in a foreign currency — we approach the ones that do. For the full evaluation, enter your income converted into euros.
Your estimate
- Monthly payment(calculation rate—)—
- Loan amount—
- Loan-to-value (LTV)—
- Purchase costs—
Our brokerage focus starts at a loan amount of around €300,000 — we arrange smaller loans too and will give you an honest read on whether it makes sense in your case.
Estimate, no guarantee. The interest rate is the calculation basis for this example, not a market rate or commitment — the rate you actually achieve depends on your credit profile, the property and the bank. Portugal: max. 80 % LTV for non-residents. Purchase costs by region as on our purchase-costs page; the other items are guide values.
Buy property in Madeira: what IMT do non-residents pay, and how much can they borrow?
Since 25 May 2026, the 7.5 % IMT flat rate for non-residents has also applied in Madeira, in addition to stamp duty of 0.8 %. The bank provides financing of up to 80 % loan-to-value for a term of up to 25 years.
- The same applies in Madeira: IMT at 7.5 % for non-residents: For private buyers without Portuguese tax residency, the regional advantage hardly applies any longer: since 25 May 2026, the flat-rate IMT of 7.5 % for non-residents has also applied here. The regional benefit remains relevant for residents. IMT for non-residents.
- How much does a Portuguese bank finance? Just like on the mainland: up to 80 % loan-to-value ratio, with terms of up to 25 years. Portuguese banks.
- Winter guests complement short-term lettings: A stable climate of 18–25 °C all year round — the effective letability is higher than in purely summer destinations; winter guests (often staying for 1–3 months) complement short-term lettings.
- How is the property transfer tax calculated for properties in Madeira? Portugal’s IMT applies to property in Madeira, albeit with a regional special feature: the thresholds for the tax brackets in the autonomous regions of Madeira and the Azores are around 25 % higher than on the mainland, which resulted in a lower effective rate for many purchase prices.
In addition, there is a stamp duty (Imposto do Selo) of 0.8 %.
However, for non-residents, the same cut-off date applies as for the rest of the country: Since 25 May 2026, a flat-rate IMT of 7.5 % has replaced the progressive scale for buyers without Portuguese tax residence (Decreto-Lei 97/2026) — with the possibility of a refund in the event of subsequent tax residency or moderate letting.
The market is concentrated in Funchal and the sunny south coast. From a tax perspective, Portugal remains an attractive option under the IFICI scheme, the more restricted successor to the NHR. Important for financing: the bank finances the purchase price, but not the IMT or purchase costs. As at 07/2026.
What do the prime locations Funchal, Caniço and Calheta offer on Madeira?
Funchal — the capital, with its Mediterranean-style old town and the upmarket residential districts of São Martinho and Santa Luzia. Caniço — suburbs with sea views. Calheta and Ponta do Sol — the western ‘Sun Coast’, with the warmest climate.
- Autonomous Region — subject to restrictions since May 2026: Madeira has traditionally had its own, lower tax rates. However, since the IMT reform (25 May 2026), non-residents have been paying a standard rate of 7.5% nationwide — including here. The regional benefit remains relevant for residents and via the two refund channels, but no longer applies automatically at the time of purchase. International Business Zone (Zona Franca da Madeira) with further benefits for holding companies — relevant for private buyers only if a specific structure is in place.
- Up to 80 % loan-to-value ratio (LTV): Portuguese banks in Madeira offer the same financing terms as on the mainland: up to 80 % loan-to-value ratio for non-residents.
- 18–25 °C all year round: Subtropical, very stable. ‘Island of eternal spring’. Rarely below 16 °C, rarely above 28 °C. Easier to let all year round than most mainland destinations.
- Germany · UK · Scandinavia: German, British and Scandinavian buyers predominate. Little mass tourism; mainly exclusive winter visitors and year-round residents.
- Funchal Airport (FNC): Infamously spectacular landing over the Atlantic. Direct flights all year round from Frankfurt, Munich and Düsseldorf. 4-hour flight time, non-stop.
What do two case studies from Madeira show?
Two typical Madeira scenarios around Funchal and the south coast — as a guide for your own plan.
Calculate your costs quickly: Pre-filled with typical values for this region — just adjust the figures and the calculation updates instantly; the region and tax rate are already set.
What are the Madeira property market and tax specifics?
Top locations are Funchal, Caniço and Calheta, Madeira has its own tax rates as an autonomous region, and Portuguese banks finance up to 80% loan-to-value for non-residents.
Up to 80% LTV (Loan-to-value): Portuguese banks in Madeira finance as on mainland Portugal: up to 80% loan-to-value for non-residents. Several major Portuguese banks have good branch networks in Funchal.
Case studies from Madeira: how have buyers financed their property?
Anonymised examples of how German-speaking buyers have financed their property in Madeira.
Madeira: taxes on property purchases: In Madeira, the same property purchase taxes apply to non-residents as on the Portuguese mainland: IMT at 7.5 % since 25 May 2026, plus Imposto do Selo at 0.8 % on the purchase price and 0.6 % on the loan.
They are paid from equity and are due before or at notarisation.
In the case of Madeira, there is one particular factor to bear in mind which has nothing to do with purchase costs but does shift the calculation: the property stock is characterised by hillside locations, and the valuation takes access routes, slope stabilisation and the condition of the building into account to a much greater extent than is the case for properties on flat land.
Because the loan-to-value ratio is based on the lower of the purchase price and the valuation, the discrepancy here tends to arise more often on the valuation side than on the tax side.
Algarve (Region · Portugal): 300 days of sunshine, up to 80 % loan-to-value ratio.
Porto (Region · Portugal): UNESCO World Heritage Site, university city.
What does Madeira's mild year-round climate mean for letting?
Subtropical, very even. The “island of eternal spring”. Rarely below 16 °C, rarely above 28 °C. Year-round lettability better than at most mainland destinations.
Two example cases from Madeira: Concrete sample calculations for typical foreign buyers — as a guide for your own plan.
How do you calculate your costs quickly?
Pre-filled with typical values for this region — adjust the figures and the result updates at once; the region and its tax rate are already set.
What is in the full evaluation by email?
Everything the calculator does not show on the page: equity needed including purchase costs, every cost item, total interest and total cost — and, with your income, how much you can afford under the 35 % rule. We approach at least 2 of the 15–20 banks we work with for your case (31 in Spain, 14 in Portugal); which ones fit, we discuss in person.
Case reports Madeira: Anonymised examples of how buyers financed their property in Madeira.
Algarve — mortgage for non-residents: Financing in the region.
Porto — mortgage for non-residents (Region): Financing in the region.
Ponta do Sol · €220,000
| Item | Amount |
|---|---|
| Equity | €66,000 (30%) |
| Mortgage | €154,000 (70%) |
| Purchase costs (~10%) | ~€22,000 |
| Loan-to-value | 70% LTV |
| Example payment (25 yrs, 3.65%) | ~€785/month |
| Bank type | Portuguese bank · Madeira |
Model calculations without guarantee. Not binding offers. Terms vary depending on credit profile, property and bank. No tax or legal advice.
Frequently asked questions
What are the purchase costs in Madeira?
As in the rest of Portugal, this amounts to around 10–11 % of the purchase price: IMT property transfer tax (7.5% flat rate for non-residents since 25 May 2026), stamp duty (Imposto do Selo, 0.8%), and notary and land registry fees (Grundbuchkosten). Madeira’s former regional tax advantage no longer automatically applies to these purchase costs — it remains relevant for residents and in the case of the two refund options.
What tax advantages does Madeira offer?
For private buyers without Portuguese tax residence, little now: since 25 May 2026 the uniform IMT rate of 7.5% for non-residents applies nationwide, Madeira included. The traditional regional discount now works only for residents and for buyers who revert to the old sliding scale. The International Business Centre (ZFM) is irrelevant for private buyers.
Which bank finances in Madeira?
We approach at least 2 of 15–20 institutions per case; several major Portuguese banks have branches in Funchal and offer non-resident programmes. Which one fits your case is settled in conversation. Terms as on mainland Portugal: 80% LTV, up to 25-year term.
What is year-round lettability like?
Thanks to the stable climate (18–25 °C year-round) the effective letting rate is higher than at pure summer destinations. Winter guests (often 1–3 months) complement classic short-term letting.
How high are rental yields in Madeira?
Funchal city: 4–6% gross. South/west coast: 3–5%. Tourist letting with an AL licence as on mainland Portugal.
Is Madeira more expensive or cheaper than the mainland?
Funchal city: comparable to Lisbon. Caniço and the south/west coast: 20–40% cheaper. Overall somewhat more price-stable than overheated mainland hotspots.
Request a mortgage
Planning a purchase on Madeira? A free initial consultation in English — also German, French, Spanish, Russian. We review your situation and find the right bank in Portugal.
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Anonymised case reports on financing in Madeira for non-residents in Portugal: what taxes and acquisition costs come to, and how buyers planned them.
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Content by Siegfried Perini — local brand representative since 2019, active in real estate since 1992, entered in the German intermediary register (§ 11a GewO) as a person directly involved in brokerage and advice. Point of contact for German-speaking buyers in Spain and Portugal. Brokerage by Olga Nikushkina, mortgage credit intermediary under § 34i German Trade Regulation (GewO); in Portugal through a locally licensed intermediary.