Real Estate Expert Reveals 62% of Americans Overpay Taxes on Portuguese Property Due to Missed Tax Credits

LISBON, PORTUGAL - November 22, 2025 - Realestate-Lisbon.com, a leading platform connecting international property buyers with verified Portuguese real estate professionals, has released a comprehensive tax compliance guide exposing critical filing errors that cause American property owners to overpay taxes by thousands annually. The analysis reveals that only 38% of US citizens with foreign rental income properly claim available foreign tax credits according to 2025 IRS data, while FBAR reporting failures trigger penalties exceeding $10,000 per violation for Americans purchasing in Lisbon's growing market.

Read our full article and guidance on our website https://www.realestate-lisbon.com/blog/regulatory-legal-frameworks/us-citizens-buying-property-in-lisbon-fbar-fatca-and-tax-treaty-considerations

The guide addresses escalating compliance challenges facing American buyers who now represent 18% of foreign property transactions in Lisbon as of Q3 2025, according to Confidencial Imobiliário. With average property prices reaching €5,847 per square meter in prime neighborhoods, US citizens face dual tax obligations across FBAR reporting requirements, FATCA compliance thresholds, and US-Portugal tax treaty provisions that directly impact investment returns. Portuguese banks now automatically report American account holders to the IRS under FATCA regulations, while missing a single FBAR deadline can trigger penalties from $10,000 for non-willful violations to $100,000 or 50% of account balance for willful failures. The comprehensive analysis covers FBAR filing requirements triggered when Portuguese bank accounts exceed $10,000, FATCA Form 8938 thresholds for foreign financial assets, US-Portugal tax treaty strategies for rental income and capital gains, and proper foreign tax credit calculations to prevent double taxation.

"American buyers consistently underestimate their cross-border compliance obligations and end up overpaying taxes by not properly claiming foreign tax credits," said Kellogg Fairbank, International Real Estate Specialist at Realestate-Lisbon.com. "Our analysis of IRS data shows 62% of Americans with Portuguese rental income fail to maximize treaty benefits, effectively paying taxes twice on the same income. We created this guide after seeing too many clients face $10,000+ penalties for missed FBAR deadlines or incorrect foreign tax credit calculations that cost them thousands annually."

Fairbank, who has facilitated over €85 million in cross-border transactions since 2010 and holds APEMIP licensing, emphasizes that compliance planning must begin before signing the CPCV preliminary purchase agreement, not after closing when American buyers typically discover their dual-country reporting obligations and annual compliance costs of €1,500-2,500.

The tax compliance guide includes downloadable FBAR and FATCA filing checklists specifically designed for American property buyers, step-by-step foreign tax credit calculation worksheets for Portuguese rental income, and a compliance calendar with critical April 15 and October 15 filing deadlines. Realestate-Lisbon.com also provides seven free property investment calculators, including the True Cost Calculator that factors in IMT property transfer taxes, stamp duty, and ongoing US reporting obligations.

You can find the all property calculators here https://www.realestate-lisbon.com/calculators

The platform connects American buyers with cross-border tax specialists on our directory page https://www.realestate-lisbon.com/professionals, experienced in both US 1040 and Portuguese Modelo 3 tax returns, English-speaking attorneys who understand US-Portugal tax treaty implications, and licensed real estate agents who coordinate with American CPAs throughout the transaction process. The complete analysis with tax treaty strategies and penalty avoidance guidance is available on the Realestate-Lisbon.com blog.

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This release was published on openPR.