Madeira Golden Visa: Complete 2024 Guide

Important Update on the Portugal Golden Visa, October 2023

The Portugal Golden Visa program has recently undergone substantial changes. The new legislation is now in effect, and it’s crucial to note that real estate investments are no longer a valid qualifying option within the program. This includes the Madeira Golden Visa option.

However, several attractive investment routes still maintain their eligibility for the program. Please refer to this comprehensive guide by our residency and citizenship division, Global Citizen Solutions: Portugal Golden Visa Ultimate Guide.

While there are many different options open to investors looking to make use of the scheme, historically, real estate has been the most popular investment pathway. As this route is no longer available, if you are looking for alternative investment options to qualify for the Golden Visa, the investment fund route is an increasingly popular pathway. You can find out more about this route here: Portugal Golden Visa Investment Fund.

The Portugal Golden Visa

Under the Golden Visa investment scheme, non-European Union (EU), non-European Economic Area (EEA), and non-Swiss nationals are able to obtain a temporary residence permit in Portugal by investing in the country. Foreign investment has significantly boosted the Portuguese economy since the program was launched in 2012.

After five years, there is the possibility to secure permanent residency and Portuguese citizenship through naturalization, provided you meet all the requirements, such as having a clean criminal record and passing an A2 Portuguese language test. 

An Introduction to Madiera

Madeira is one of the most captivating islands in the world. The autonomous region of Portugal has long been a favorite with expats looking for a safe place to move to that has all the amenities they need, a sublime climate, and delectable cuisine.

You can also find out more about the beautiful island of Madeira in our article: Madeira Portugal Real Estate.

Golden Visa Investment Options

The Madeira Golden Visa was an option open to individuals seeking residency in Portugal in return for an investment into the property market on the island. However, as per new legislation that came into force on 7 October 2023, it is now no longer possible to invest in real estate and be eligible for the program. 

However, there remain several attractive options on the table, which you will find detailed below. 

• Fund Subscription: Contribute a minimum of €500,000 to a certified investment fund.
• Arts or Heritage Reconstruction Contribution: Contribute at least €250,000 towards the arts or the restoration of national heritage. Note that if the project takes place in a Portugal low-density area, then a 20 percent discount will apply.
• Scientific Research: Contribute €500,000 or more to research in the field of science or technology.
• Job Creation: Generate and sustain ten positions over the specified period.
• Share Capital and Job Creation: Establish a company or strengthen its share capital with an investment of €500,000, combined with the creation of five jobs or the maintenance of ten (with at least five being permanent).

You can see more information on the changes in our article: Understanding the Portugal Golden Visa Changes. 

Other Golden Visa Routes: Investment Funds

While the real estate investment pathway has historically been the most popular investment option under the Portugal Golden Visa, now that this investment option is no longer open to investors, the investment fund route is an excellent alternative. 

This option has proved to be popular with American nationals in recent years. For foreign investors, the investment fund route can be a fast and straightforward option with the potential for high returns on investment and few transaction costs. 

The minimum investment for the investment option is €500,000, which you will need to make in a qualifying investment fund. 

To find out more, you can check out our article: Portugal Golden Visa Investment Fund Option: The Complete Guide. 

Property Taxes

While the Madeira Golden Visa option is no longer open to investors, Madiera remains an excellent choice for families, retirees, or investors looking to buy property in Portugal. As such, you will want to be aware of the property taxes that you will need to pay. 

Property taxes that you should be aware of include Property Transfer Tax (IMT), stamp duty, and Municipal Real Estate Tax (IMMI). You should ensure that you are well informed on the taxes that you need to pay at the time of purchase and the taxes you’ll need to pay after you have bought the property. 

Municipal Property Transfer Tax (IMT) 

The Municipal Property Tax or IMT (Imposto Municipal sobre as Transmissoões de Imóveis) is levied each time you purchase property in Portugal. The rate varies according to the type of property and its value. This tax needs to be paid before purchasing the property. 

Three key criteria are considered to determine the IMT:

• Type of property (urban or rural)
• Location of the property (autonomous region of Portugal or Continental Portugal)
• The purpose of the purchase (primary or secondary residence)

In certain situations, there can be exemptions to IMT, such as buying for resale or urban rehabilitation. 

Stamp Duty

As a general rule of thumb, property transactions are subject to stamp tax at a rate of 0.8 percent. This needs to be paid at the time of purchase. 

Municipal Real Estate Tax (IMI)

The IMI (Imposto Municipal sobre Imóveis) is an annual tax that is determined by the municipality where your property is located. IMI rates are established each year by the municipalities and usually fall in the following ranges: 0.3-0.45 percent for urban dwellings and 0.8 percent for rural properties. 

The IMI is levied on the property tax value and not on the purchase price of the property. Broadly speaking, the tax value of the property is much lower than the market price value of the property.

Provided certain conditions are met, properties that are located in a rehabilitation area and are subject to rehabilitation works are exempt from IMI for a three-year period, beginning from the year in which the rehabilitation works were completed. 

If the property is registered as being your permanent residence, then the IMI can be extended for five additional years upon the owner’s request. 

Madeira Golden Visa: Best Locations for Property

Madeira has some truly spectacular locations to choose from, including Funchal, Camara de Lobos, and Machico. In this section, we’ll provide you with a little more information on each so you’re well-informed of your options on the table. 

Also, remember that there are so many top locations, and we have not mentioned each of them here. For example, Porto Santo is an incredible place, providing picturesque mountain views that would also be a very good choice to scout out your dream home or holiday retreat. 

If you’re looking to purchase real estate in Funchal, you’ll find many options open to you, with several different types of property up for grabs in the city and surrounding area, whether you are looking for a luxury villa or a modern apartment. 

For more information on luxury property in Portugal, you can check out the following two articles:

• What are the Main Types of Luxury Property in Portugal?
• Luxury Properties in Portugal: Key Regions

Camara de Lobos  

Camara de Lobos is a picturesque coastal town located on the south coast of Madeira, just to the west of Funchal. Nestled between dramatic cliffs and the sparkling Atlantic Ocean, this charming fishing village offers breathtaking views and a laid-back atmosphere and is well known for its colorful boats. Camara de Lobos is also famous for its excellent seafood, particularly the local specialty, “Espada com banana” (scabbard fish with banana). With its scenic beauty and authentic charm, Camara de Lobos is a delightful destination for those seeking a tranquil escape in Madeira. You’ll find many stunning waterfront properties in this part of the island. 

Ponta do Sol is home to the oldest parish church on the island, Igreja de Nossa Senhora da Luz, which dates back to the 15th Century. This is also the home of Madeira’s Digital Nomad Village initiative, a co-working space that is, in many ways, the dream location for remote workers. 

Machico 

Machico, the second largest city in Madeira, carries significant historical importance as it served as the initial landing spot for the island’s first explorers. Today, Machico presents a captivating blend of the past and present, featuring historical landmarks like the Church of Our Lady of the Conception alongside a contemporary artificial sandy beach.

Garajau 

To the east of Funchal is Garajau. Garajau gained recognition due to its unspoiled beach, Praia do Garajau, acclaimed as a nature sanctuary and one of Madeira’s most exceptional diving spots. The translucent waters host a variety of marine creatures, while the remarkable Christ the King statue presides over the landscape from the cliffs, serving as a prominent point of reference. The name Garajau holds intrigue as it denotes a prevalent seabird species, the tern, frequently found in this region.

Why Madeira?

For those who have visited the stunning island of Madeira, this question will be easy to answer. There are numerous reasons why living in Madeira, a beautiful Portuguese island located in the Atlantic Ocean, can be an appealing choice. Here are some key reasons why:

• Climate: Madeira enjoys a mild and subtropical climate throughout the year, with warm summers and mild winters. The abundance of sunshine creates a pleasant atmosphere, ideal for outdoor activities and a relaxed lifestyle.
• Natural Beauty: Madeira is renowned for its breathtaking landscapes, featuring lush forests, dramatic cliffs, and picturesque coastlines. The island provides ample opportunities for hiking, exploring nature, and savoring awe-inspiring views. The tranquil and idyllic environment adds to the allure of living in Madeira.
• Quality of Life: Madeira consistently ranks high in terms of quality of life. The island offers a secure and safe environment, boasting a low crime rate. Additionally, the healthcare system is modern and of excellent quality, ensuring residents have access to top-notch medical care. There are also excellent international schools in Madeira, so rest assured if you are moving with family. There are also many expats living on Madeira, so you should easily be able to make a circle of friends on the island. The affordable cost of living in Madiera also contributes to the overall high quality of life.
• Cultural Heritage: Madeira showcases a rich cultural heritage, blending Portuguese traditions with influences from various cultures. The island hosts vibrant festivals and events throughout the year that celebrate its arts, music, and cuisine. Residents can immerse themselves in a diverse and captivating cultural scene.
• Outdoor Activities: Madeira is a paradise for outdoor enthusiasts. Whether you enjoy hiking, surfing, scuba diving, or simply basking on beautiful beaches, the island caters to a wide range of interests and fitness levels, providing abundant options for outdoor recreation.
• Food: Madeira is also renowned for its delicious cuisine. The island offers a wide array of traditional dishes, including fresh seafood, succulent meats, and locally produced fruits and vegetables. Residents can indulge in a culinary adventure, exploring the flavors and tastes that Madeira has to offer.

You can also check out this article on what sets Portugal apart: Portugal Quality of Life: Top Ten Reasons to Move to Portugal.

A real estate agent in Madeira can be invaluable in assisting you through the property purchase. The unique distinction between a real estate agent and a buyer’s agent is that a buyer’s agent will work solely on behalf of you – the buyer. A real estate agent, however, works on behalf of the seller and will get a higher commission for a higher sale. 

If you are looking for Madeira Apartments to Rent so that you can first get to know your island before settling on a specific location, this can be a good idea so that you can use your rented proeprty as a base to explore proeprty options.

Contact the Goldcrest team to access exclusive information on the property market in Portugal and find out how much you can save on your international investment.

You can get in touch with us today. 

Explore your residency options

As we’ve mentioned before, it is no longer possible to invest in real estate for the Portugal Golden Visa.

If you would like to discuss other Golden Visa options, Global Citizen Solutions, our residency and citizenship division, will be able to assist you throughout the Golden Visa process.