Portugal’s Non-Resident Tax Changes Nothing for Prime Madeira, Black Privé Finds

The flat 7.5% IMT on non-resident buyers since May matches what Madeira already charged above EUR 1.44M. Below that it costs more, but movers can reclaim it.

LONDON, ENGLAND, UNITED KINGDOM, October 6, 2026 /EINPresswire.com/ — Portugal’s new flat transfer tax on non-resident home buyers makes no difference at the top of the Madeira market, according to an analysis of the 2026 rules by luxury property marketplace Black Privé. Since 25 May 2026, a buyer who is not tax-resident in Portugal pays IMT, the property transfer tax, at a flat 7.5 percent on a home, from the first euro and with none of the usual exemptions or reductions. In Madeira, a second home priced above EUR 1,438,566 was already taxed at a flat 7.5 percent before the change.

The reason is regional. Madeira and the Azores use the national IMT rates, but every bracket limit is 25 percent higher than on the mainland. For a second home in Madeira in 2026, the flat 7.5 percent rate starts at EUR 1,438,566, against EUR 1,150,853 on the mainland. Above that price, a non-resident pays exactly what they would have paid before the new rule.

“The new rule reads like a tax on foreign buyers. In fact it’s a tax on non-residents, and at the prime end of Madeira it changes nothing,” said Alexander Thornbury, lead property analyst at Black Privé. “A EUR 2 million villa carried 7.5 percent before May and carries 7.5 percent now. Below that level it costs more, but a buyer who moves to the island within two years can claim the difference back, and then pays income tax 30 percent below the mainland.”

The change lands in a market that is rising fast. INE, Portugal’s statistics office, put the median price of homes sold in Funchal at EUR 3,601 per square metre in the first quarter of 2026, up 23 percent on a year earlier, while the number of sales across the region fell 24 percent. These are medians across all homes, and prime homes sell above them.

The numbers, in detail.

At the prime end. On a EUR 2 million home, a non-resident pays EUR 150,000 in IMT and EUR 16,000 in stamp duty at 0.8 percent: EUR 166,000 in all, the same as before 25 May. Both taxes are charged on the higher of the price and the tax office’s valuation, and legal and registration costs come on top.

Below it. Between EUR 792,414 and EUR 1,438,566, a Portuguese resident buying a second home in Madeira pays a flat 6 percent, while a non-resident now pays 7.5 percent. On a EUR 1 million purchase, that is EUR 75,000 instead of EUR 60,000.

What comes back. Below the threshold, the tax office refunds the difference on application if the buyer becomes tax-resident in Portugal within two years of the purchase, or lets the home within six months, at a rent inside the legal cap, for at least 36 months of the first five years. The test is tax residence, not nationality, so a foreign national who is already tax-resident in Portugal pays the ordinary rates.

For buyers who move. At the top of the market the transfer tax is the same either way, so the case for moving rests on income tax. From 2026, Madeira residents pay income tax at regional rates 30 percent below the mainland in every band, which puts the top rate at 33.6 percent against 48 percent. The cut applies to residents only, and buying property does not bring residency with it: Portugal removed real estate from its golden visa in October 2023.

Black Privé’s Madeira property tax guide sets out every charge from purchase to inheritance, and its guide to buying luxury property in Madeira covers the market, residency and the island’s prime areas, alongside buyer guides for the UK, the US, Ukraine, Germany, Austria and Switzerland. Black Privé works with buyers in Madeira from EUR 2 million.

The figures above are general information on the 2026 rules, not tax advice.

About Black Privé. Black Privé is a curated luxury property marketplace serving ultra-high-net-worth buyers across Monaco, Dubai, Marbella, Mallorca, Andorra, Madeira and select international destinations. Properties from EUR 3 million, and from EUR 2 million in Andorra and Madeira. Editorial analysis is led by named, attributable property analysts. Author profile: Alexander Thornbury, alexanderthornbury.com. Thornbury is the author of Quiet Capitals, a guide to property, residency and luxury living in Spain, Andorra and Monaco. Latest revision: October 2026.

Alexander Thornbury
Black Privé
press@blackprive.com
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