Once you have found the property you were looking for, you will have to go through some legal procedures; here are some tips to help you in this process. Note that the information given below is quite general; we advise you to appoint a lawyer specialized in the property real estate business in order to represent and guide you throughout the process of property purchase/sell/rental.
The following legal documentation will be necessary, in different steps of the process.
Portuguese Fiscal Tax Number – It can be obtained at Loja do Cidadão (in Funchal, Madeira) or at the local Tax Offices.
Buying and Selling Promissory Contract – this document should be written by your appointed lawyer; it establishes all terms and conditions of the transaction and must be approved and signed by both the seller and the buyer, in the presence of a notary or a lawyer. The purchaser must lodge a deposit. The Portuguese law establishes that if the purchaser breaches the contract, the deposit is lost; on the other hand, if the seller breaks the terms established in the contract, he will have to refund an amount equivalent to the double of the value of the deposit.
Land Registration Certificate – issued at the local Land Registry offices, this document provides a detailed description of the legal background of the property, including if it has any type of registered mortgages, or servitudes.
Fiscal Registration Certificate – it provides information on the fiscal tax number of the property, as well as on the areas, typology and other description data.
Property Usage License – it certifies that the property is licensed for the purpose it is designated for (residential, commercial…)
Property/Sale Final Deed – it is signed by both seller and buyer, at a Notary Office, in the presence of a lawyer. The final payment is made at this time. The notary verifies all the legal aspects of the transaction, including the payment of the purchase tax (IMT). The original document is then held by the Public Notary Office and a copy is registered at the Public Registry Office. Another certified copy is given to the purchaser.
Property Purchase Registration – issued by the local Land Registry Office.
Taxes and purchase costs
- IMT – Transfer Tax
IMT PURCHASE TAX for Permanent Residents (People who live in Madeira at least 6 months per year)
| %Tax | Amount paid for the residential property | Fraction to reduce |
| 0% | Until €112,125.00 | - |
| 2% | Between €112,125.00 and €153,375.00 | € 2,242.50 |
| 5% | Between €153,375.00 and €209,125.00 | € 6,843.75 |
| 7% | Between €209,125.00 and €348,500.00 | € 11,026.25 |
| 8% | Between €348,500.00 and €696,875.00 | € 14,511.25 |
| 6% | Above €696,875.00 | € ------- |
IMT PURCHASE TAX for Non-Permanent Residents (People who live in Madeira for less than 6 months per year)
| %Tax | Amount paid for the residential property |
Fraction to reduce |
| 1% | Until €112,125.00 | - |
| 2% | Between €112,125.00 and €153,375.00 | € 1,121.25 |
| 5% | Between €153,375.00 and €209,125.00 | € 5,722.50 |
| 7% | Between €209,125.00 and €348,500.00 | € 9,905.00 |
| 8% | Between €348,500.00 and €668,375.00 | € 13,390.00 |
| 6% | Above €668,375.00 | € ------- |
- Stamp Duty – it refers to 0.8% calculated on the price of the residential property.
- IMI Tax (Annual Municipal Tax)
| % Tax | Type of property |
| 0.8% | Rustic and/or Agricultural plot |
| 0.4%-0.8% | Urban (house, construction plot) |