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Living in the Azores and Madeira

Researched and written with AI tools from official sources. How we make our guides

Life on Portugal's Atlantic islands: official INE rents and prices, lower VAT and income tax, regional healthcare, and the resident air fare subsidy.

The Portugal Brief 7 min read

Living in the Azores and Madeira

Last verified: October 2026.

Who this is for

  • You are thinking of moving to the Azores or Madeira, to work, retire, or work remotely.
  • You want to compare the two archipelagos on cost, tax, healthcare, and travel.
  • You already live on the islands and want to check the regional tax rates or the air fare subsidy.

Not for you if: you want a warm mainland region with easy road links. Read Living in the Algarve.

Updated October 2026. Since 15 January 2026, island residents can claim the air fare subsidy online for flights bought from that date.

The Azores and Madeira are Portugal's two autonomous regions in the Atlantic. They follow national law on residence and nationality, but each has its own government, health service, and lower tax rates. Rents differ sharply. In the second quarter of 2026, the median rent on new leases was €7.00 per square metre in the Azores and €12.78 in Madeira, according to INE, the national statistics institute. Funchal, Madeira's capital, is one of the most expensive places to rent in Portugal outside Lisbon.

The two regions at a glance

The Azores are nine islands in the middle of the Atlantic, in three groups. São Miguel, with the regional capital Ponta Delgada, is the largest. Terceira (Angra do Heroísmo) and Faial (Horta) are the other main centres. The climate is mild and wet, and the weather changes quickly. The islands are one hour behind mainland Portugal.

Madeira is two inhabited islands, Madeira and Porto Santo, further south and closer to Africa. Most people live on the south coast of Madeira, around Funchal. The island is mountainous, with steep roads, and has a warmer, sunnier climate than the Azores.

Both regions are part of the EU and of Portugal. The same visas and residence permits apply as on the mainland. See Visas and Residency in Portugal.

What it costs to rent

INE publishes the median rent per square metre on new leases, based on real contracts declared to the tax office. Listing sites show asking prices, which are often higher. The last column is our own arithmetic for a 50 m² one-bedroom flat (T1). It is a guide, not a quote.

MunicipalityMedian rent per m²50 m² at the median
Funchal (Madeira)€14.03about €700
Santa Cruz (Madeira)€11.46about €575
Ponta Delgada (São Miguel)€8.00about €400
Câmara de Lobos (Madeira)€7.96about €400
Lagoa (São Miguel)€6.88about €345
Angra do Heroísmo (Terceira)€5.95about €300
Ribeira Grande (São Miguel)€5.69about €285
Horta (Faial)€4.41about €220

Source: INE, new leases in the 12 months to June 2026.

Small islands have few leases each year, so their figures move a lot and some are not published. Horta's figure is based on 63 leases. Rents in Madeira rose 17.4% in the year to the second quarter of 2026, well above the national rise of 10.2%.

In INE's last household budget survey (2022 and 2023), households in the Azores spent less than in any other region, an average of €19,431 a year.

What homes sell for

INE's median sale prices per square metre, based on real sales in the 12 months to March 2026:

AreaMedian price per m²
Funchal€3,322
Santa Cruz€2,617
Câmara de Lobos€2,500
Madeira region€2,578
Ponta Delgada€2,017
Horta€1,359
Angra do Heroísmo€1,316
Azores region€1,494

In the first quarter of 2026 alone, the median was €2,863 per m² in Madeira and €1,617 in the Azores, against €2,337 for Portugal as a whole. For the buying process, read Buying Property in Portugal as a Foreigner.

Lower taxes

VAT (IVA). Both regions charge less VAT than the mainland:

RateMainlandAzoresMadeira
Reduced6%4%5%
Intermediate13%9%12%
Normal23%16%22%

Income tax (IRS). If you are tax resident in the Azores, your income tax rates are 30% lower than the national rates. Madeira sets its own income tax rates by regional law. The tax office (Finanças) applies the regional rates according to your tax address, so update it when you move. See Changing Your Registered Address in Portugal and How Taxes Work in Portugal.

National tax schemes, such as the IFICI regime that replaced NHR, apply on the islands too. See Qualifying for the IFICI Tax Regime That Replaced NHR.

Healthcare

Each region runs its own public health service, instead of the mainland SNS.

Azores. The regional health service (Serviço Regional de Saúde) has three hospitals: Divino Espírito Santo in Ponta Delgada, Santo Espírito da Ilha Terceira in Angra do Heroísmo, and Horta on Faial. Every island has a health centre, including the smallest, Corvo. For some specialist care, patients travel to a larger island or the mainland.

Madeira. The regional health service, SESARAM, runs the health centres and the Hospital Dr. Nélio Mendonça in Funchal.

To use public care, register at the health centre for your address once you live there legally. Ask the health centre which documents to bring. The SNS 24 line (808 24 24 24) and the 112 emergency number work on the islands too. See Healthcare in Portugal.

Getting there and around

Flights to the mainland. If you have lived in the Azores or Madeira for at least six months, the state pays part of your fare through the social mobility subsidy (subsídio social de mobilidade). Displaced students qualify too. The most you pay for a return trip is:

RouteResidentsStudents
Azores and the mainland€119€89
Madeira and the mainland€79€59
Azores and Madeira€79€59

You pay the full fare when you book, then claim the rest back. The subsidy covers eligible fares up to a cap (€600 for an Azores return, €400 for Madeira).

How to claim:

  1. Buy your ticket and keep the invoice and boarding passes.
  2. Travel.
  3. Claim online on gov.pt, signing in with your Citizen Card or Digital Mobile Key (Chave Móvel Digital). This works for tickets bought from 15 January 2026.
  4. For older tickets, or claims for a company, go to a CTT post office.

Between the Azores islands. The regional government's scheme also covers inter-island flights for residents. Ask the regional mobility office (Direção Regional da Mobilidade) for current fares and ferry routes.

On the islands. On most islands you will need a car. Bus services are limited outside the main towns. Madeira's roads are steep and winding.

Weather delays. Wind and fog can delay or divert flights, especially in winter. Leave spare time around important trips.

Daily life and community

The Azores. Small, close communities with a quiet, outdoor life: hiking, volcanic lakes, and the sea. Outside Ponta Delgada, you will need Portuguese for most daily tasks. Shopping and services are more limited than on the mainland, and some goods take longer to arrive.

Madeira. Funchal is a busier city with more shops, services, and English spoken in hospitality. Levada walks (paths along old irrigation channels) are a big part of island life. Flat land is scarce, and many homes sit on steep slopes.

Universities. Each region has a public university: the University of the Azores and the University of Madeira.

Schools. State schools teach in Portuguese. See Schools and Childcare in Portugal.

Is island life right for you?

What draws people:

  • Nature, a slower pace, and small communities.
  • Lower VAT in both regions, and income tax rates 30% below the national rates in the Azores.
  • Low rents in the Azores outside Ponta Delgada.
  • A capped return air fare to the mainland once you are resident.

What to plan for:

  • Distance and weather: flights can be disrupted, and travel to other islands takes planning.
  • Rising rents and prices, especially in Funchal.
  • Fewer shops, services, and specialist doctors, especially on small islands.
  • The need for Portuguese, especially in the Azores.
  • Most people need a car.

Before you commit, rent a place for a month or more, ideally in winter. Check the commute, the weather, and the services you use often.

This guide is general information, not legal, tax, or financial advice. Rents, prices, and tax rates change; check the official source before you act.

Sources

This guide is written from official sources and, where relevant, organisations' own websites.

Last verified October 2026. Rules and fees change; check the official source before acting.

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