July 27, 2021

How mortgages will be after the legal change | My money

How mortgages will be after the legal change | My money



And now that? Will the mortgages change? In just three weeks, contradictory judgments of the Supreme Court and regulatory changes around the tax on documented legal acts – the highest expense in the formalization of mortgages – have revolutionized the mortgage market. Bank sources, experts and lawyers explain what banks and consumers will have to comply with from now on.

Who should pay the tax for documented legal acts?

The Council of Ministers approved on Thursday a royal decree that forces to pay to the banks the tax linked to mortgages from now on. The change of the tax regulations takes effect this Saturday, so that it will be effective in the mortgages that are signed from Monday. The express reform of the government was carried out after the Supreme Court on Tuesday exempted the bank from assuming this tax and ruled that the client should continue paying it.

Why up until now did the mortgaged assume it?

Article 68.2 of the regulation of the rate of documented legal acts dating from 1995, establishes that the client is the taxpayer of the tax. But a sentence of the Supreme Court on October 18 changed the doctrine by considering that the beneficiary of the mortgage deed is the bank and, therefore, must bear the expense. And there the controversy originated. The next day, a plenary session was convened for November 5 in order to clarify the ruling. After two days of deliberation, the high court reversed.

Will mortgages become more expensive?

Experts assume that banks will transfer the new cost to the price of loans and mortgages will be more expensive, although they expect the increases to be moderate. The entities admit to be studying and changes in their loans, although most have not yet taken concrete decisions, very aware of what their competitors do. Financial sources indicate that "each bank will decide based on its commercial policy", but they affirm that "financing conditions will continue to be favorable". The objective will continue to be to not let the profitable customer escape.

How much can the interests of the loans raise?

It is possible to get an idea taking as reference the increases that some entities have applied in the last weeks. CaixaBank has raised the fixed rate of its shortest term by 0.4 points, while Ibercaja has raised it by 0.15 points, as well as the differential of its variable mortgage. According to Kelisto.es, "an increase in interest on mortgages of 0.10 points would mean spending 10% more than the consumer paid when he had to pay the AJD". In the opinion of Santos González, president of the Mortgage Association, "in recent years the process of processing, negotiation and formalization of credit has become more expensive and, if costs go up, it is normal that the market price positioning changes".

Will it affect all mortgages equally?

As usual, the client's profile and solvency determine in many cases the negotiation of loan conditions. Thus, increases in spreads or fixed rates do not have to be the same for everyone. Fernando Encinar, head of studies of idealist, believes that the strong competition among banks to attract customers "could minimize the rise in mortgages" and adds that "being a tax transferred to the autonomies and whose application is not homogeneous, it will cause citizens have different mortgage conditions depending on where they reside, since the amount that the bank will have to pay will be different in each case ".

Can the government prevent the increases?

The government has said it will "watch" so that the bank does not shift the tax to customers, but has not detailed how it will prevent it. It seems difficult for the Executive to control the prices set in a free market.

Can banks charge new fees?

The mortgage reform establishes that all the initial commissions (opening or study) must be reunified in one and clarifies that the service provided for each new commission that is applied must be justified, which will make it difficult for new commissions to be applied.

Can those who already have a mortgage recover the money?

Not at the beginning. Miguel Ángel Hortelano, partner of the Legal Forum office, points out that "the possibility of claiming is extraordinarily complicated" since the Supreme Court maintains the previous jurisprudence that the taxpayer is the citizen. "The only case in which you can modify a sentence of the Supreme Court is for a ruling against the Court of Justice of the European Union," he says. It happened with the abusive ground clauses, although this time the clause of a mortgage contract is not a debate but a tax.

Is it possible to go to European courts?

Citizens do not have direct access to the European court. Only judges and courts can submit a preliminary ruling to this court. That is to say, that any Spanish court that is dealing with a matter on this matter has any doubt about its compatibility with EU law.

Can you claim the rest of notary, agency and registry expenses?

It is possible to claim the rest of expenses of constitution of a mortgage, as the notary, agency and registry. In fact, it is already being done and, according to Miguel Ángel Hortelano, "on this issue there is uniformity of the courts when it comes to recognizing it".

Could the IAJD be eliminated?

The Government does not consider the suppression of a tax that contributes 2,000 million euros of income to the autonomous communities.

There may be price differences according to the autonomous community, since the tax varies depending on the place from 0.5% to 1.5%

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