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The Palheiro Gardens border the Casa Velha hotel in the grounds of the Palheiro Estate and were created by the first Conde de Carvalhal some 200 years ago. They are visited by 37-40.000 people every year.

Marcus Binney in 2011 wrote in his book:

Palheiro's claim to fame lies no less in the size and splendor of its trees – forest species like oak, beech, chestnut and cedar grow beside exotics like eucalyptus and araucaria pines. The monarch of the garden is a splendid specimen of Arucaria Angustifolia, the candelabra tree from Brazil, run close by the Hymenosporum flavum, the Australian jasmine tree. Other noble trees are a huge Californian redwood, Sequoia sempervirens, a magnificent 38-metre-tall Araucaria exelsa from Norfolk Island and a huge Araucaria bidwillii with pineapple shaped cones.

Daffodils appear in January when the camellias have already been flowering for three months. The blooms of dozens of magnolias glow luminously against brilliant-blue February skies – as well as their cousin Michelia doltsopa from the Himalayas. Cascading purple heterocentron basks on walls, while white wisteria enfolds the trellises. In April the blue Paulownia tomentosa flowers with the purple wisteria. The handkerchief tree, Davidia involucrata, the tulip tree, Liriodendron Tulipifera follow in May.

High summer is marked by the globe flowers of hundreds of blue and white agapanthus lining the drive and paths together with the flowering Eucalyptus ficifolia and the Lagerströmia indica, followed by banks of hydrangeas. In September large drifts of pink belladonna lilies spring from the ground. The first Sasanqua camellias appear in October. Mildred Blandy, who grew up in South Africa, regularly sailed home on the Union Castle Line bringing back a magnificent series of proteas which grow in profusion on a bank just below the main house. Among these are the King Protea, shaped like a giant pink artichoke.

At the bottom of the garden are a number of different banksias, the Australian cousins to the proteas with barrel-like clusters of flowers, a rich source of nectar. Nearby is the rare camellia, C.Granthamiana from Hong Kong, and equally rare Sauraja Subspinosa, a Burmese tree with pale pink flowers marked with red and followed by a crop of luscious berries.

Another room in the Jardim da Senhora or lower garden is formed of neatly clipped topiary which look like clusters of peahens with fantails. The latest addition is a rose garden created in 2007 by Christina Blandy around stone rings salvaged from Banger's Pillar, a 1798 landmark on the Funchal waterfront demolished despite strong town opposition in 1939. This is planted with old-fashioned roses which are trained up the arches. Look out for the grass tree from Australia with its thick fire-resistant trunk.

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