Buying property in Madeira: prices, areas and what to check

Madeira has quietly become one of the most asked-about places in Portugal for international buyers. Mild weather all year, dramatic mountains dropping into the Atlantic, a safe and friendly island capital, and direct flights to much of the UK and Europe. It is also where GetCasa is based, in Funchal.

Buying here follows the same Portuguese process and the same national laws as on the mainland, but a few things are genuinely different: prices have risen fast, the regional income tax is lower, the IMT bands are a little more generous for residents, and the island's geography brings its own checks. This guide covers what we tell clients who are thinking about Madeira, with official figures where they exist and honest caveats where they do not.

Why buyers look at Madeira

Madeira is an autonomous region of Portugal, an island in the Atlantic closer to Morocco than to Lisbon. It is part of Portugal and of the EU, uses the euro, and follows Portuguese law, with its own regional government and some regional tax powers.

What draws people is easy to see. The climate is mild through the year, without the cold, damp winters of northern Europe or the scorching inland summers of the mainland. The south coast is the sunnier, drier side; the north is greener and wetter. Funchal is a proper small city with hospitals, international schools, restaurants and a busy harbour, and outside it you are quickly into mountains, terraced banana plantations and the famous levadas, the old irrigation channels that now double as walking trails.

The flip side is that it is an island. Choice of homes is smaller than on the mainland, some goods cost more, and you will rely on flights to get anywhere else.

What property costs in Madeira

The most reliable public figures come from INE, the national statistics office, and from DREM, the regional statistics office. They measure the median price per square metre of homes actually sold, which is a better guide than asking prices on portals.

Sources: INE data for the second quarter of 2026, as reported by Forbes Portugal and JM Madeira. In plain terms, a 100 square metre flat at the Funchal median would be around €364,000, though individual homes vary widely with view, condition and exact location.

Bank valuations tell a similar story. According to DREM, in September 2026 the median bank valuation for housing in the region was €2,642 per square metre, with Funchal at €3,037 and Santa Cruz at €2,707. Smaller municipalities such as Calheta and Ponta do Sol do not have enough valuations each month to be published separately, so be wary of anyone quoting precise official figures for them.

Two honest notes. First, these are medians: sea-view villas in the west and new-build flats in central Funchal sell well above them, and older homes in need of work inland can sell below. Second, after rises of this size, negotiate on evidence, using recent sales rather than asking prices.

The main areas, briefly

Madeira is small, but each area has its own character. A quick, deliberately general tour:

• Funchal. The capital and the most liquid market, with the widest choice of flats, services and schools. Neighbourhoods range from the historic centre to quieter residential hillsides with views over the bay. Higher up usually means better views, cooler air and steeper roads.
• Caniço and Santa Cruz. East of Funchal, close to the airport, popular with families and people who want a little more space while staying within easy reach of the city.
• Machico. On the east coast beyond the airport, a historic town with a sandy beach and generally a more local, less international feel.
• Câmara de Lobos. Just west of Funchal, a fishing town that has become more sought after as Funchal has grown more expensive.
• Ponta do Sol and Calheta. On the sunny southwest coast, popular with remote workers and buyers looking for villas with sea views. Prices for good views here can be high, and the choice of homes is limited.
• The north coast. Towns such as São Vicente and Porto Moniz are greener, wetter and quieter, with more traditional homes and fewer services.

If you are still deciding between the island and the mainland, our comparison of Lisbon, Porto and the Algarve covers the main mainland options.

Taxes: what is national and what is regional

IMT and stamp duty

IMT, the transfer tax, is set by national law, and the new non-resident rule applies in Madeira too. Since 25 May 2026, under Decreto-Lei 97/2026, a buyer who is not a Portuguese tax resident pays a flat 7.5 percent IMT on residential property, with no exempt band, per Andersen. Advisers in Funchal such as Madeira Corporate Services confirm it applies on the same terms in Madeira as on the mainland. If you become a Portuguese tax resident within two years, you can reclaim the difference.

For residents buying a permanent home, the autonomous regions use IMT bands that are 25 percent higher than the mainland's. In 2026 that means the first €132,933 is exempt in Madeira, against €106,346 on the mainland, as set out in the tax authority's 2026 tables (Ofício-Circulado 40129/2026) and summarised by Madeira Property. Stamp duty on the deed is the same 0.8 percent. Our guide to IMT and buying costs explains how the bands work.

Income tax for residents

Here Madeira is genuinely different. The regional government can reduce IRS rates for people who are tax resident in the region, and for 2026 it applies the maximum 30 percent reduction against mainland rates across all nine brackets, according to the regional tax authority's January 2026 tax agenda and Observador. This only matters if you actually move and become tax resident in Madeira, and how it interacts with your home country's tax and any special regime is a question for a tax adviser.

IMI

IMI, the annual property tax, is charged by the municipality at a rate it sets within national limits, so it varies between Funchal, Santa Cruz, Calheta and the rest. Ask for the current rate and the property's tax value (VPT) before you buy, and see our IMI guide for how it is calculated.

Getting there

Madeira is well connected for an island. Its airports handled a record of almost 5.7 million passengers in 2025, according to DREM. There are frequent flights from Lisbon and Porto, and the UK is the largest international market, with direct routes from many UK airports including Manchester, Birmingham, Bristol, Edinburgh and Glasgow during the 2025/26 winter season, per Travelling for Business. From the US, most journeys connect through Lisbon or another European hub, so check current schedules for your city.

One practical note: Madeira Airport is known for strong winds, and flights are occasionally diverted or delayed. If you plan to commute regularly, build a little flexibility into your travel.

Local things to check before you buy

The legal process is the same as anywhere in Portugal, but the island adds a few checks we look at on every Madeira purchase:

• Slopes and access. Much of Madeira is steep. Check the road to the house in all weathers, parking, the number of steps to the front door and whether a delivery van or an ambulance can get close. A beautiful view can come with a very steep drive.
• Damp and microclimate. Humidity varies a lot with altitude and which side of the island you are on. Higher and north-facing homes can be cloud-covered for long periods. Look for damp, mould and ventilation, and ask about heating and dehumidifiers. This is where an independent survey earns its fee.
• Building licences on rural land. Plots and homes outside urban zones are subject to the municipal master plan (PDM) and other land-use rules. Not every piece of land with a ruin on it can be rebuilt or extended. Your lawyer should check the zoning and the licences for any existing building before you sign.
• Unlicensed extensions. Added rooms, terraces and pools are common across Portugal. Make sure what is on the ground matches the registered plans. Our guide to the documents to check explains how.
• Levadas, water rights and paths. Rural properties may have rights of way or shared water channels crossing them. These are part of island life, but you should know about them in advance.
• Wildfire and storm exposure. Like much of southern Europe, Madeira has had serious wildfires in recent years. Ask about vegetation clearance around the property and check your home insurance cover.
• Holiday rentals. If you plan to let the home short term, check the current local accommodation (Alojamento Local) rules and any limits in that municipality before you buy, rather than assuming a licence will be available.

How the purchase works

The steps are exactly the same as on the mainland: get a NIF, open a bank account, arrange financing if you need it, find the home, make an offer, run the legal checks and survey, sign the CPCV and pay the deposit, then sign the deed and register the home in your name. You can do it all remotely with a power of attorney. Our step-by-step guide to buying a home in Portugal covers each stage, and our guide on whether you need a buyer's agent explains who works for whom.