A Guide to Buying/Selling in Madeira

Buying a property in Madeira can be a daunting process for some, particularly when dealing with services and local departments in a foreign language. Purchasing or selling your home is relatively straight forward once you understand the proceedures which differ from country to country. Sometimes it may be simpler to use a licenced agent (One that displays the word AMI followed by four numbers). Using a licenced agent has its benefits in that they will have professional insurance, which will give you legal protection in case you encounter any problems or have any queries. However, many people ‘do it themselves’ and can conduct a purchase/sale with relative ease.

In this Guide we point out a few simple steps to help you understand the process, but we do highly recommend that throughout the transaction, that you employ the services of a lawyer, who will of course aid you throughout and more importantly, has YOUR interests at heart!

The island of Madeira has become a very popular destination over the years for people who want to emigrate to the island or simply have a second home, there are now many fantastic properties available so one is now really and literally spoilt for choice! So first of all take a look at the following and decide what it is you are looking for and what you require:

What sort of property are you looking at buying? Apartment, House, (new or old), a renovation project, land or pre-construction.How many rooms do you need? Number of bedrooms, a laundry, garden, a garage or an office. Do you want something already furnished or do you have your own furniture? (look into costs of transporting your own and compare to buying new) Do you need a pool or space where one can be built to your own requirement? Will you be using it as a holiday home, permanent residence or for investment purposes? Will you be a cash buyer or need a mortgage and if so will you need assistance to gain finance in Madeira? Will you be in Madeira whilst purchasing your property or will you need someone to act on your behalf if you are in a different country? How much do you have to spend and will your budget cover the above needs?

Obviously at this stage you have found something that you like, meets your criteria and fits in your budget.

You will have already met the vendors or their agent who is acting on their behalf. Normally you would make an offer on your chosen property and also stipulate a few of your terms attached to your offer. These are a few things that you should consider:

The timescale in which you would like to complete If you are taking out a mortgage with a local or offshore bank, the timescale that they would be able to adhere to for completion Your deposit and how much, (this is sometimes calculated on the percentage of the overall agreed asking price of the property but is also negotiable between purchaser and vendor). What fixtures and fittings you require to stay with the property. Keep in contact with your lawyer with everything you discuss with the vendor or get him to put your proposal together for you. Make sure that you have had a survey of the property carried out BEFORE you sign anything. Often new buyers are told they don’t need them! Your lawyer should carry out checks with the local Camara about the property, so check with him that there are no levies, boundry disagreements or future Camara plans for your new property.

The first contract you will encounter is the ‘promise of sale’ or ‘Contracto promessa de compra e venda’. Now that you have agreed the points above and are satisfied to proceed further and with the green light from your lawyer, you will be asked to complete the contract and also hand over your deposit. Please remember that once you have gone this far, there is no turning back as at this stage, should you pull out of the purchase, you will loose your deposit. However, should the other party pull out, they will have to repay the deposit plus a compensationary payment – but, getting your money back in the unlikely event that this should happen to you, can be a lengthy process. You will need the following to complete this contract:

Full details of both the Vendor and Buyer, this includes; full names, date and place of birth, addresses and passport or ID number as well as a contribution number. (Ask your lawyer how to get your ‘Cartao do Contribuente’ as you will need one to purchase your property/ buy a car/ get your car tax/ insurance ect).The description of the property and where it is That both parties are in agreement with the sale/purchase. The deposit amount to be paid with the agreement and the outstanding value that needs to be paid on completion. The time period between this contract and the completion date. Inclusion of what was agreed i.e. fixtures and fittings and any other relavant details. The contract is signed by all parties including the lawyer and maybe in front of a notary. This is now legally binding, and you are now ready with the next step to buying your dream property!

Once both parties have completed all the requirements that were agreed on the promissary contract and within the time scale, you will be given a date to attend the Notary. You will need your lawyer to be present and he will do a final check that all documents are in order. If you are taking out a mortgage with a local bank, do not be surprised to see a representatvie of the bank attending the proceedings as well. If an Estate agent is used for either or both parties they will also be present at the Notary.

Remember to take your passport/ID and contribution number with you.When all the parties have gathered you will enter a private room with the Notary who will then read out the contract in front of everybody and in Portuguese. If your lawyer can translate on your behalf, he will make sure that you understand the terms of the contract before you sign it. As soon as every one is happy, signatures are required and then monies are transferred.

Yes, you haven’t finished yet! You need do a few more things as you are moving in:

Take the papers from the Notary to your local Town Hall and register your home with the local council and also apply for a rate exemption if you are a first time buyer.To register services such as water, electric and telephone in your name, you will need to visit the appropriate departments and take the following:Copy of the ‘Escritura’ and papers relating to your property purchaseYour passport/IDYour Contribution number