The Realities Of Retiring To Madeira – Your Questions Answered By An Expert

Considering Madeira as a retirement destination? Find the answers to the most common questions you as an expat might have when moving to Madeira.

A Madeira expert Zarin Buckingham from Madeira Relocation & Expat Services answers all your questions about moving to and settling down in Madeira. 

The Q&As are updated regularly. If you cannot find an answer to a particular question, please, comment with your query and we will do our best to help.

Zarin has worked and lived in Austria, Germany, Slovakia, Switzerland, the UK, and the United States before moving to Madeira. She is the co-founder of Madeira Relocation & Expat Services, which was established to help expats in Madeira by offering free and useful information and connecting them to reliable and capable experts.

Madeira Relocation & Expert Services is not a profit-making entity. It is an active group that reaches out to consulting specialists as well as volunteers who are capable and willing to offer their time, expertise, knowledge, and best practices to the expat community in Madeira.

Zarin has a deep understanding of the norms, rules and regulations in Madeira. She is also very familiar with questions and worries you may have when relocating here and is in a perfect position to help you. 

Retiring to Madeira
Marina da Quinta Grande, Madeira

Is Retiring to Madeira a good idea?

Retiring to Madeira might be the best idea of your life if it’s the island lifestyle you are looking for.

Madeira has received the World Travel Award as the “best island destination of Europe” for seven out of eight years in succession.

The island’s year-round temperate climate, incomparable natural beauty, rich cultural heritage, gastronomy based on fresh and varied local ingredients, friendly and hospitable community are only some of its characteristics that attract retirees and digital nomads to this unique spot in the Atlantic Ocean.

Madeira offers a range of favorable conditions that make it one of the best places in Portugal to retire to.

Aside from its breathtaking landscapes and mild climate, Madeira is a very affordable place, where the prices of real estate, utilities, transport and use of technology are relatively low.

Moreover, Madeirans are renowned for their hospitality and many people speak English, German or French. While learning Portuguese will ease integrating into the island seamlessly, one can quite comfortably get by speaking English.

Various regional and international surveys find Funchal, the capital city of Madeira, on top of the list of cities with the best quality of life. It is a “Little Big City” that offers a cosmopolitan life without the stress and traffic associated with bigger cities.

Funchal also has the only assisted living facility in Madeira, Dilectus, where you can find a combination of the comfort and privacy of your own home with the convenience of hotel services and support you need in your golden years.

What is a Taxpayer Identification Number and do I need one to retire to Madeira?

You will need your NIF (Número de Identificação Fiscal) or Taxpayer Identification Number for numerous daily activities including opening a bank account, purchasing insurance policies, purchasing a car, signing up for internet and phone services, starting a company and purchasing property.

In Madeira, they often refer to this number also as “Número de Contribuinte.”

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If you are a couple, each one of you needs your own NIF.

This number does not change and does not have to be updated or renewed. You can get your NIF in person at the tax office or have someone you know and trust, or a service provider, get it on your behalf.

If you are not in Madeira, then you will need a tax representative who will assume the responsibility to ensure that your tax affairs are in order. The service provider will often offer this as the NIF package.

They will charge a fee for this service. If you hire a lawyer to do this, they often charge a substantial fee. It is, therefore, best to compare fees before you decide.

Do I need a residency permit for retirement and which one?

Depending on which country you come from, you may or may not need a visa to enter or stay in Portugal.

Retiring to Madeiar as an EU citizen

If you are from an EU country, you can come and go freely and stay in Portugal for up to 90 days.

You can get a Tax Identification Number, open a bank account, purchase a property, retire or set up a company as a non-resident.

If you are staying in Portugal for more than 90 days you must apply for a registration certificate (Certificado do registo de cidadão da União Europeia).

It is a relatively simple process that requires the submission of documents such as proof of identification and address, an application form and paying a personal visit to the City Hall.

In most cases, you should receive your residency within a couple of weeks.

Retiring to Madeira as a non-EU citizen

If you are from countries outside of the EU, there’s a bit more paperwork to go through.

Some of the most common forms of residency permits for non-EU citizens are the D2 Visa (Self-employed / Entrepreneurs), D3 Visa (Specific Specialization), D7 Visa (passive income holders & retirees), and the Golden Visa (Investment) with D7 and Golden Visa being the best options for retiring to Madeira.

You can find more information about various residency options in our Living In Portugal guide.

Can I apply for the Non-Habitual Residency (NHR) if I am retiring to Madeira?

Yes, you can, and if you qualify there will be certain benefits regarding your tax situation.

However, let’s first clarify what the NHR is and what it is not.

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In my personal opinion, this program was given a confusing name!

Many expats think this is an alternative to being a resident. Whereas this is really a tax regime that provides foreign citizens with a tax exemption on their foreign income and tax benefit on income received in Portugal.

This program has a specific time period within which you must register, namely latest by 31st of March following the year of your tax residency in Portugal was issued. If you miss this deadline, often it is almost impossible to register for it later.

One of the conditions is that you should not have been a resident for 5 years prior to the acquisition of your current residency.

It is definitely worth paying enough attention to this regime and being well informed about its conditions and deadlines as soon as you receive your residency in Portugal.

For expats retiring to Madeira the main benefit of the NHR is a flat tax rate of 10% that they pay on the pension income for the first 10 years of living here.

You can find more detailed information on the NHR, how to qualify and apply in our guide on Foreign Pensions And Tax In Portugal.

Can I hire an accountant to manage my tax affairs in Madeira?

You can and you should. Retiring to Madeira comes with certain tax reporting obligations best dealt with by professionals. The problem is, however, finding an accountant you can trust.

This is a sensitive topic and if I want to be “politically correct”, I should probably omit this paragraph!

Too many foreigners have paid a heavy price by accountants’ negligence in providing sufficient or correct information, preparing in time, or submitting financial data to the tax authorities before reviewing the details and giving the client a chance to correct errors or make adjustments.

Contrary to the assumption of most foreigners, especially those coming from Europe and North America, accountants in Madeira are not held liable, nor do they feel liable for the negligence of the client.

They may feel liable to the authorities but not for damages inflicted upon the clients.

It is best not to take it for granted that you would receive a reliable service from every licensed accounting firm.

Asking for verifiable recommendations when choosing an accountant or tax advisor, staying involved and ahead of schedule, asking questions and checking on deadlines and deliverables, requesting reports, and regular contact with your accountant are some key factors for reducing the risk of having taxation and other financial and fiscal problems.

What’s the best way to find a rental property in Madeira?

You can find a rental place online, on social media platforms or through a realtor.

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Most realtors charge the owner for a month’s rent as a commission.

You may also use a service to find you a rental home based on your requirement. Most services including us charge you one month’s rent for this service.

What do I need to rent a property in Madeira?

Most homeowners want to have a financial guarantee such as a salary or pension income confirmation, or bank statements.

It is common to ask for a deposit – the equivalent of two months’ rent, in addition to paying the rent at the beginning of each month.

Is there a rental contract?

We recommend that you sign a formal rental contract.

Long-term rental often means a period of at least 12 months. It is important to notice if the terms of the contract permit giving notice of termination within the 12 months period or only after the 12 months have passed and if the contract will be automatically renewed or not.

When signing a rental contract make sure there’s a take-over protocol attached which is an appendix that includes the list and status of all items left in the property. Whether it is appliances, furniture or the wood floor, you could take pictures of them and attach them to the appendix.

On the day of receiving the rental property, both the owner and the tenant, or their representatives, should sign this take-over protocol.

After the rental period is over, the same has to be done.

If anything was damaged during the rental period, then the damage will be paid out of the deposit that was paid in advance. If no damage was done, then the owner is obliged to return the deposit back to the renter within 5 working days after the take-over.

It is not advisable to pay the deposit or rent in cash and without a formal contract.

What’s included in the rent?

The rental price depends on the market price, the location and the quality of the property. Properties could be compared to similar ones in the same and surrounding areas to make sure you are paying a fair price.

The monthly rent may or may not include utilities, such as electricity, water and gas. Some owners provide internet and phone services but often this cost is not included and has to be paid separately.

How can I find a trustworthy estate agent in Madeira?

Real estate agencies or individual realtors must have a real estate license and a corresponding license number which you can check online.

Since that seems to be the only part of the real estate practices that is regulated, the quality of service that you can get from realtors in Madeira can be anywhere from excellent and reliable to extremely unprofessional, unreliable and irresponsible.

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While some carry out their work in a very professional manner, others resort to unethical practices such as keeping interesting properties that have long been sold online, to get clients to reach out to them.

At this point, they would have already been speaking to the clients and getting their information before telling them that this specific property is no longer available but that they have lots of others to offer!

I am planning to buy a house in Madeira, are there any pitfalls to look out for?

Here are a few things you need to pay attention to:

1. A licence of habitation

As a rule, there’s a checklist of documents that need to be available to “OK” the house for sale. However, exceptional situations happen when an inexperienced realtor can miss something out.

For example, most properties (with the exception of older properties) must have a license of habitation. An older license may exist and your realtor would check that requirement as fulfilled.

However, if the previous owner or the one before him has made changes to the property that have not passed through the City Hall’s process of approval, your property will not be licensed to use.

This means that moving into that property, or making renovations would be illegal.

You may only become aware of this the hard way when you start renovation and an inspector from the City Hall officially informs you that you have to put all work on hold and close up the building until the property is “legalized”.

You will have to hire a land surveyor and an architect to draw detailed plans of the property and submit a project of legalization to City Hall.

In the worst-case scenario, City Hall may ask you to demolish those parts of the property that are not in compliance with legal building standards and norms.

In the best case, they will approve your project after a period of about one year or more depending on where your property is located.

2. Location and access

Whether you are buying a property for investment or to live in, it is important to know how far it is from major roads and services, what type of road it is on, and what is it close to.

The following are some examples of properties that should be pursued with caution.

Some roads in Madeira are only about the width of one car and yet they are two-way roads. You may want to consider if you really would like to pursue a house on such a road.

Some houses have no access by car. Although they may even be assigned a parking spot at the street level, you will have to park your car and climb some stairs and pass by a few other homes to reach yours.

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If you are planning to move a container of your household goods to Madeira, this may not be your best choice. Also, this might not be suitable for retirees.

These houses of course are selling for much lower prices, so if you are aware of this fact and make an informed decision to purchase, it may be a good decision. As long as this does not come to you as a surprise.

3. What’s in the vicinity

It is also important to know if there is anything in the area that you would like to avoid.

A client was very interested in a property close to the beach. The apartment looked charming and the price was quite reasonable.

We offered to send a real estate expert to the location and found out that the property is very close to old sewage and it was impossible to avoid the bad odour being around all day and night.

4. Surveys and checks

Then of course there are many checks to be made about the history of the property, permits, license, and ownership which need to be thoroughly checked before you make an offer.

When you buy a home in Madeira, house surveys are not automatically carried out. Surveys are not part of the house purchase process.

If you are receiving a mortgage to purchase a house, the bank sends an evaluator to assess the value of the house, but again, that is not surveying the house for the purpose of assessing its building quality.

5. Do not buy a property online!

Recently, many people have been buying properties by making online tours.

Some have been fortunate enough to purchase relatively none problematic properties, but others have had rude surprises, including the house not having proper access to the road, not having the right license to live in, not being permitted to carry out reconstruction, etc.

There is so much more to buying a property in a new country than just liking the look and the number of bedrooms.

If you absolutely have to purchase while you are not present, then it is best to ask experts to go and visit the house and send you a report. This should not only include a general evaluation, but also a technical survey and all related due documentation, even those outside of the realtors’ checklist.

If you need experts for inspecting a property you are interested in, Madeira Relocation Services can provide this service for you.

Can I get a mortgage in Madeira to purchase a property?

Even as a non-resident, you could qualify for a mortgage if you have the right documents to submit and a house that you are interested in purchasing.

Most banks offer a 20-80% deal to a non-resident approved applicant. We can put you in touch with a mortgage advisor for a free consultation.

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How much will I pay for health insurance in Madeira?

The price of private insurance may sound expensive to some Europeans, but to US citizens it should appear very inexpensive.

A person, falling within the age range of 50-60, would pay anywhere around EUR 90-140 per month depending on their specific priorities. For younger people, this is much cheaper, on average about EUR 800-1000 per year.

Experience has shown that many of the private insurers in Madeira are reluctant to offer policies to older foreigners (e.g., aged 65 and up). In this case, you might want to have a look at international health insurance options.

Can I access Public Health Service in Madeira?

When you are officially a tax resident in Madeira, you are entitled to receiving the national health care benefits and are covered by that service. You can still keep your private insurance if you so decide.

You can read more about public healthcare in Portugal in our Living In Portugal guide.

About Madeira Relocation Service

Madeira Relocation & Expert Services provides useful information, filters and evaluates providers of goods and services and offers honest recommendations to those who need those services. These recommendations are solely based on quality, reliability and accountability and not on any monetary reward or incentive.

As much as possible, we provide information and recommendations for no charge. If however, we must hire other experts and workers who charge for their time and effort, then we will also set fees for those services, in order to cover the costs.

“Our mission is to empower the community in which we live, and to give the people we serve a better chance of integration in their new home, while they step outside of their comfort zone to embrace this new home and make it a wonderful experience.”

Zarin Buckingham, Madeira relocation Services

If you have questions about moving to Madeira, please, comment below and we will do our best to help. Alternatively, contact Madeira Relocation Services directly through the website.

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Zarin Buckingham

Zarin Buckingham is a senior consultant and international trainer. Zarin has worked and lived in Austria, Germany, Slovakia, Switzerland, the UK, and the United States before moving to Madeira. She is the co-founder of Madeira Relocation & Expat Services, which was established to help expats in Madeira by offering free and useful information and connecting them to reliable and capable experts.

Madeira Relocation & Expert Services is not a profit-making entity. It is an active group that reaches out to consulting specialists as well as volunteers who are capable and willing to offer their time, expertise, knowledge, and best practices to the expat community in Madeira.

Not only does the group consult experts and gather useful information to share, but it also filters and evaluates providers of goods and services and offers honest recommendations to those who need those services.

As much as possible, the group provides information and recommendations for no charge. If however, they must hire other experts and workers who charge for their time and effort, then the group also sets fees for those services, in order to cover their costs.

You can get in touch with Zarin through Madeira Relocation Services.

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2 Comments

  1. Hello!
    I have a question about D7 visa. I’m planning to relocate to Madeira in the beginning of ’23. I’ve heard that there is an option to move as a tourist and within 90 days to apply directly to SEF instead of applying for 4months D7 visa from abroad. It makes it much easier to find an apartment, open bank account etc. Is this the correct information?
    I have a few more questions, if possible – contact me via emails. Thanks a lot!
    P.S. I’m planning to purchase a house in the next few years, but certainly not right away…a lot to learn about areas etc.

    • Hi Tara, I believe our Madeira expert Zarin has contacted you via email. Check your spam in case you haven’t received anything yet.

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