Madeira Property Taxes: IMI, IMT, Stamp Duty

Taxes can add tens of thousands of euros to the price of a property in Madeira. To buy wisely, it is essential to understand how the three main taxes are calculated: IMT, Stamp Duty, and IMI. This guide presents the rates, the brackets in force in the Autonomous Region of Madeira, and the main exemptions available (including the IMT Jovem scheme and the temporary IMI exemption for primary and permanent residence). It also includes a comparison with mainland Portugal, showing the points where Madeira is fiscally lighter.

IMT: the purchase tax

IMT (Imposto Municipal sobre as Transmissões Onerosas de Imóveis) is the heaviest tax at the moment of purchase. It is paid before the deed is signed and is calculated on the higher value between the purchase price and the Tax Asset Value (VPT) of the property.

What makes Madeira different is the tables: the brackets are approximately 22.5% higher than on the mainland. In practice, this means you can buy a more expensive property in Madeira without paying IMT (or paying a lower rate) than you would for an equivalent property in Lisbon or Porto.

There are three distinct tables, depending on the purpose of the property and the buyer's profile.

IMT Brackets in Madeira: Primary and Permanent Residence (general regime)

Up to €132,933: exempt (0%)
From €132,933 to €181,838: marginal rate of 2%, with a deductible amount of €2,658.66
From €181,838 to €247,934: marginal rate of 5%, with a deductible amount of €8,113.80
From €247,934 to €413,174: marginal rate of 7%, with a deductible amount of €13,072.48
From €413,174 to €826,228: marginal rate of 8%, with a deductible amount of €17,204.22
From €826,228 to €1,438,566: flat rate of 6%
Above €1,438,566: flat rate of 7.5%

Purchases up to €132,933 intended as a primary and permanent residence are fully exempt from IMT in Madeira. On the mainland, the same threshold is €106,346.

IMT Brackets in Madeira: Secondary Residence or Investment

Up to €132,933: 1%
From €132,933 to €181,838: marginal rate of 2%, with a deductible amount of €1,303.26
From €181,838 to €247,934: marginal rate of 5%, with a deductible amount of €6,651.45
From €247,934 to €413,174: marginal rate of 7%, with a deductible amount of €11,512.91
From €413,174 to €792,414: marginal rate of 8%, with a deductible amount of €15,563.64
From €792,414 to €1,438,566: flat rate of 6%
Above €1,438,566: flat rate of 7.5%

Unlike the general regime, there is no exempt bracket; any purchase pays IMT, even if only 1% in the first bracket.

Other cases:

Rural properties: flat rate of 5%
Other urban properties (non-residential): 6.5%
Aggravated rate: 10% when the buyer is a legal entity with tax residence in a country, territory, or region with a privileged tax regime (list approved by Portaria 150/2004), or an entity controlled by one. This rate does not apply to individuals.

IMT Jovem: the game-changing benefit for buyers under 35

Since 2024, buyers aged 35 or under can benefit from a significant IMT exemption when purchasing their first primary and permanent residence. In Madeira, the scheme is even more advantageous than on the mainland thanks to the regional uplift.

IMT Jovem Brackets in Madeira

Up to €413,174: exempt (0%)
From €413,174 to €826,228: marginal rate of 8%, with a deductible amount of €33,053.92
From €826,228 to €1,438,566: flat rate of 6%
Above €1,438,566: flat rate of 7.5%

Cumulative conditions:
Be 35 years old or under at the date of the deed
The property must be a first primary and permanent residence
Not be considered a dependent for IRS (Portuguese income tax) purposes
Not have owned an urban property in the past three years
Keep the property as primary and permanent residence for six years

The exemption also extends to Stamp Duty on the transfer (0.8%). For couples where only one partner meets the requirements, the exemption applies only to the eligible buyer's share.

Important: if the property ceases to be a primary and permanent residence within six years of purchase (through sale, rental, or conversion to short-term tourist accommodation), the benefit lapses and IMT must be paid with late-payment interest.

Stamp Duty: the silent tax

Frequently overlooked, Stamp Duty (Imposto de Selo) appears at two distinct moments of the purchase.
On the transfer: flat rate of 0.8%, applied to the higher of the purchase price and the VPT. It is paid before the deed, together with IMT.

On the mortgage: if you take out financing, Stamp Duty may apply to the use of the credit, charged when the loan amount is released:

Loans up to 5 years: 0.50%
Loans longer than 5 years: 0.60%

In residential mortgages, there are exemption regimes that apply to the interest paid on the loan. The practical application of this tax and its exemptions depends on the structure of the credit contracted and should be confirmed with the financial institution and the contractual terms.

For gratuitous transfers (inheritances and donations), the rate is 10%, but spouses, descendants (children), and ascendants (parents) are exempt.

IMI: the annual tax

IMI (Imposto Municipal sobre Imóveis) is charged annually on the property's VPT. Madeira stands out positively here: all 11 municipalities in the region apply, in 2026, the legal minimum rate of 0.30% for urban properties (the rate for rural properties is 0.80%, set nationally).

For a property with a VPT of €200,000, the annual difference between Madeira (0.30%) and a municipality applying the maximum (0.45%) is €300, a saving that, at the current pace, adds up to thousands of euros over the years of ownership.

Temporary IMI exemption for primary and permanent residence

Properties acquired as a primary and permanent residence can benefit from an IMI exemption for three years, extendable by two more years through municipal deliberation. The conditions are:

VPT of the property not exceeding €125,000
Property intended as the primary and permanent residence of the household
The owner cannot hold another property as primary and permanent residence

The exemption is granted upon request to the Tax Authority and can be granted a maximum of twice during the lifetime of the owner or the family unit. It starts counting from the year following the acquisition.

AIMI: the additional tax affecting high-value portfolios

The Additional IMI (Adicional ao IMI) applies to the taxpayer's total residential property portfolio in Portugal (residential properties and building plots only), when the accumulated VPT exceeds €600,000 on 1 January of each year.

For the typical private buyer purchasing a single home, AIMI is rarely a concern. But for those who hold multiple properties, a high-value property, or structure the acquisition through a company, it is a significant annual cost.

Rates vary according to the type of taxpayer:

Individuals: €600,000 deduction (€1,200,000 for married couples or civil partners under joint taxation). Above the deduction, the rate is 0.7% up to €1,000,000, 1% up to €2,000,000, and 1.5% above that.
Companies: no deduction. Rate of 0.4% up to €1,000,000 and 1% above. Entities based in tax havens are taxed at 7.5%.
Undivided estates: flat rate of 0.7% on the value exceeding €600,000.
For detailed calculations and specific situations, consult the official AIMI page or a certified accountant.

Madeira International Business Centre (MIBC)

Madeira is the only region in Portugal with a special tax regime authorised by the European Union: the Madeira International Business Centre (MIBC), established in 1987 to attract international economic activity to the region.
Companies licensed within the MIBC benefit from significantly reduced taxation on several taxes, including, as regards real estate:

80% exemption on IMI for properties used for the company's installation
80% exemption on IMT on acquisitions intended for the company's installation
80% exemption on other local taxes and fees

This regime is not intended for the private buyer purchasing a holiday apartment or a primary residence. It is aimed at investors who structure the acquisition through a company licensed in the MIBC and meet the regime's requirements (job creation, eligible activity, among others). For that profile, however, the benefits are substantial and warrant specialised advice.

Practical example: how much does it cost to buy a €350,000 property in Madeira?

Imagine you are buying a property in Madeira for €350,000, with a VPT equal to or lower than the purchase price. Let's look at the tax costs for two different buyer profiles.

Scenario A: Primary and permanent residence

Applying the €247,934 to €413,174 bracket (marginal rate 7%, deductible amount €13,072.48):

IMT: (350,000 × 7%) − 13,072.48 = €11,427.52
Stamp Duty (transfer): 350,000 × 0.8% = €2,800
Total taxes before the deed: €14,227.52

If you take out a mortgage, additional Stamp Duty may apply to the use of the credit (0.50% up to 5 years, 0.60% above).

Estimated annual IMI (VPT around €200,000, rate 0.30%): €600/year.

Scenario B: Same property, young buyer (≤35), first home

Applying the IMT Jovem table in Madeira, €350,000 falls entirely within the exempt bracket up to €413,174.

IMT: €0
Stamp Duty (transfer): €0 (also exempt under the IMT Jovem scheme)
Total before the deed: €0
Total saving compared with Scenario A: €14,227.52.

In summary

Madeira is, in several respects, fiscally lighter than the mainland, but the complexity of the regimes requires careful study. Knowing the brackets and understanding the available benefits are essential for a well-planned and advantageous purchase. In three specific situations, it is always worth consulting a professional: acquisitions through a company or corporate structure, buyers close to the 35-year age limit (where the timing of the deed is critical), and properties whose value brings the total portfolio above €600,000.

Tax regimes are reviewed annually; always confirm the current tables and exemptions on the Portal das Finanças before making decisions.