The Supreme Court changes its criteria and establishes that the tax on mortgages must be paid by banks

Fuente: El Mundo. Manuel Marraco. 18 de Octubre 2018.

The Supreme Court has changed its criteria and has established that it is the bank and not the client that must pay the Duty of Legal Documents tax. In addition to clarifying what will happen in future mortgages, the decision opens the door for users to demand the return of what they paid in their day for this tax.

This tax is the main cost of setting up a mortgage. The applicable tax rate varies in each Autonomous Community, but in general terms it ranges between 0.5% and 1.5% of the amount of the mortgage. For a writing of 150,000 euros, it ranges between 750 and 2,250 euros, an amount that the client does not have to face directly.

The reason for the decision is that the only interested party in which the mortgage is recorded in a public deed and registered in the registry is the financial entity, since this ensures the recovery of the amount borrowed in case of default. This implies that, according to the tax law, it must be the entity that pays it.

User associations, financial entities and diverse jurists disagree about what is going to happen now. One possibility is that everything is confined to the tax area and that it is the contentious-administrative jurisdiction that resolves the cases. It is the option posed by banks, since it would limit claims to mortgages signed in the last four years.

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