Is Madeira transitioning into an island characterised by tourism-related taxes? Furthermore, how are these funds being allocated, given that their impact is not that apparent in maintenance, repairs, or other critical areas?
This situation certainly does not alleviate the challenges faced by the local population, who are already contending with significantly higher prices across various sectors. And for tourists this could add a significant amount on a weekly stay.
Madeira, a destination prized for its natural beauty and hospitality, is undergoing a major policy shift, moving to implement a series of wide-ranging tourist taxes. Authorities in the Autonomous Region of Madeira are rapidly expanding the number and type of fees levied on visitors, citing the need to fund critical infrastructure, manage tourism pressure, and sustain conservation efforts.
Here is a breakdown of the key tourist taxes that have been introduced or are proposed across the island, along with relevant figures.
These figures are from the first half of 2025, and as we now know all PR trails are paid, and increases in prices in some areas will start in January 2026, Cabo Girão is expected to be 5.00 euros, and price increase also expected for Fanal, along with the trail PR1 Pico do Areeiro to Pico Ruivo which will reopen the end of April 2026
1. The Municipal Overnight Stay Tax (The “Bed Tax”)
The most prominent tax is a standard municipal tourist tax applied to accommodation, often referred to as a “bed tax.” This fee is charged for stays in hotels and Local Accommodation (AL) establishments. I believe Santa cruz was the first to start this, but it is now across the island.
The revenue is earmarked for urban services, including garden maintenance, road repairs, and cultural events, helping to offset the pressure placed on municipal services by a high volume of visitors. This we can see money has been spent on new road layouts and repairs in some places, not for the better in some areas.
2. Cruise Passenger Levy (Port Tax)
To address the impact of day visitors who do not contribute to the accommodation tax, the municipality of Funchal introduced a fee for cruise ship arrivals.
This levy ensures that the thousands of transit visitors who spend a day exploring Funchal also contribute to the city’s upkeep.
3. Access Fees for Trails and Levadas
Madeira is world-famous for its network of ancient water channels (levadas) and hiking trails. To fund the maintenance and conservation of these popular natural sites, fees have been introduced. You only have to look at Ponta São Lourenço to know that no money has been spent on the up keep of trails, and this route has been charged for several years starting at 1 euro.
4. Proposed Car Rental Tax
In a bid to manage increasing traffic congestion, particularly in high-tourist areas, the Regional Government of Madeira has been discussing a new tax targeting visitors who rent vehicles.
This is still under discusion I believe, and is expected to be 2 euros a day.
Also we can add on the parking charges at some of the locations now, some as high as 4 euros an hour at Pico do Areeiro.
Conclusion: The Rationale Behind the Levies
The concerted introduction of these varied taxes signals a decisive shift in Madeira’s tourism strategy. Regional leaders argue that the fees are a necessity, ensuring that the burden of expanding services and repairing infrastructure is shared by the millions of annual visitors who benefit from the island’s unique environment.
With municipal taxes, cruise levies, and trail access fees now active, Madeira is rapidly building a comprehensive system where virtually every aspect of a tourist’s visit—from where they sleep to where they walk— to where they disembark a cruise ship— to where they will drive, comes with a direct financial contribution to the island’s sustainability. This could add 100s of extra euros to a couples stay over a week, and a Family even more.