July 25, 2021

Banks will not pay the tax on mortgages granted to the State, the Church and NGOs

Banks will not pay the tax on mortgages granted to the State, the Church and NGOs


The banks will assume from tomorrow the payment of the tax of documented legal acts that taxes the mortgages and that until now it was the responsibility of the clients, except in the loans granted to the Church, the political parties with parliamentary representation or the State, among others.

The Official State Gazette (BOE) publishes today the royal decree law approved on Thursday by the Council of Ministers with the aim of clarifying who should assume the payment of this tax.

Measure, adopted as a matter of urgency, comes after the plenary session of the Contentious-Administrative Chamber of the Supreme Court decided that the rate should be assumed by the client and not by financial institutions, contrary to what was determined in three judgments in mid-October.

The regulation modifies article 29 of the consolidated text of the Law on Transfer Tax and Stamp Duty to establish that in the case of loan deeds with mortgage guarantee the taxpayer of this tax will be the lender, that is to say, that is the bank who must pay it.

In addition, the Government decree also modifies Article 45 to prevent banks from paying this tax when they grant mortgages to entities that the law already exempted from paying it.

In its article 45, the law establishes that the State and the territorial and institutional public Administrations and their establishments of charity, culture, Social Security, teachers or scientific purposes are exempt from the payment of this tax.

The exemption is also applicable to political parties with parliamentary representation, the Spanish Red Cross, the National Organization of the Spanish Blind (ONCE), the Pious Work of the Holy Places and the Catholic Church and the churches, confessions and religious communities that have signed agreements of cooperation with the State.

Neither should non-profit entities under the special fiscal regime, such as foundations, associations declared of public utility, development NGOs or sports federations.

Likewise, savings banks and banking foundations are included as exempt for acquisitions directly destined to their social work.

The tax on property transfers and documented legal acts is a tribute of indirect nature that the autonomies collect and taxes onerous patrimonial transfers, corporate transactions and documented legal acts. EFECOM

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