Real Estate Purchase Taxes in Madeira
Everything You Need to Know

I - Transfer tax (IMT)
Since January 2004, the transfer tax has been known as IMT ("Municipal Tax on Transferable Payments") and is calculated at the higher of the two taxable values (equity value of the property - tax assessment, or the acquisition price, whichever is the higher) highest):

• Residential (houses and apartments) 0% - 7.5%;
• Rustic property (Agricultural land) 5%;
• Urban, land for construction or trade 6.5%.

When an urban property is purchased for own and permanent housing, the IMT is lower than for secondary housing, and if the acquisition or VPT is less than € 115,508.75, this tax is exempt.

II - Stamp tax: 0.8% on the acquisition price.

These taxes are paid before signing the deed.

Tax representation
Companies typically charge an initial fee of approximately € 250, and an annual fee of approximately € 250 for the services described above.

Property registration fee
You will have to register the purchase at the Land Registry Office of the area in which the property is located and at the Tax Office. The main costs are as follows:

• Acquisition record € 250;
• Mortgage registration € 250;
• Extras +/- € 100.

Notary fees
When the notary profession was privatized, notary fees changed substantially and now depend on the office where the Deed is signed. The Public Deed of Purchase and Sale must be prepared, signed by both parties in front of a public notary and presented to the Land Registry, with copies for the parties involved.

IMI - Annual Property Fees
The IMI is an annual tax on a property that is stipulated by each municipality, but within the range defined by law, which this year is 0.3% to 0.45% for urban buildings and 0.8% for rustic buildings . In relation to urban buildings, the tax is determined annually by the City Council of the area where the property is located.

The calculation of the IMI is based on the tax equity value of property on December 31 of each year, and is due at the end of April of the following year. If the amount exceeds € 250.00 it can be paid in two installments, the first at the end of April, and the second at the end of November, the year following the year in which the tax applies.

When an urban property is purchased for permanent own housing, its owner can benefit from an exemption from the payment of IMI for a period of 3 years, if the acquired property has a tax equity value that does not exceed the value of € 125,000.00 and the owner, in the previous year, did not have a taxable income, for IRS purposes, of a value greater than € 153,300.00.

Opening accounts in Portugal
All Portuguese banks are part of a national group of banks called Multibanco. This makes accounts easily accessible and account holders can use an ATM debit card at ATMs across the country and to purchase most goods.

Non-EU citizens need the following to open a bank account in Portugal:

• A passport;
• Proof of address in the country of origin;
• Taxpayer card and proof of employment;
• Tax Representative.