The process of purchasing property in Madeira is very straightforward with a good level of protection and minimisation of risk.

Depending on the length of time you plan to take to complete the purchase, the normal process is to secure your purchase by signing a promissory contract of purchase and sale with the seller.  This, when accompanied by a first payment (sometimes called a deposit) from your side, binds you and the seller and obliges both of you to complete the respective purchase and sale of the property on or before the date specified in the contract.  There is no fixed amount of the first payment but it should be as big as you are confortable to pay, within the following framework: The law regarding this states that in the event that the buyer does not complete the promised purchase, he will forfeit (lose) the first payment that he made. However, if the seller does not complete his promised sale, he must refund your first payment and pay you a further amount equal to your first payment - this is a good protection for you.

As an example:  Imagine you are buying a house and you pay a first payment with the promissory contract of EUR 50,000 to the seller.  If you walk away from the purchase you will lose this money, but if the seller wishes to withdraw from the sale, he must give you EUR 100,000 in return.  As you can see he will think twice about not completing his obligation to sell to you and the purchase will be secure the minute you have signed the promissory contract and made the first payment.  If you had agreed to pay a first payment of EUR 1,000, you can see that neither you nor the seller are very heavily commited and so it would not be difficult for either of you to withdraw from the transaction.

Completing your purchase:

The rest of the amount of the purchase price (i.e. the toal price agreed minus the first payment) is paid over at completion of the purchase, which takes place in the notary's office with signature of the final contract.  This is called escritura in Portugal.  At this occasion, the keys are handed to you and you are the owner of the house. Immediately after this, the house should be registered in your name. 

As you can see, the process is straightforward and provides a very good level of protection to you the buyer. Bearing in mind that even the most straightforward transactions sometimes canhave unexpected surprises, our advice is that your purchase should always be overseen by a lawyer appointed by you, to ensure that your best interests are being served.  The lawyer you appoint should practise in Madeira, speak your language or a language with which you are comfortable, and be a member of the Order of Advocates in Portugal.

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If you wish to rent out your property on a long-term basis while you are not in Madeira, the speak to us about this as we can assist you in this respect. However, if you are planning on renting your property to short term holiday renters, then you should consider Easy Holiday Rentals, a site which specialises in holday rentals in Madeira, Portugal and Spain.