Mon. Apr 6th, 2020

The bank continues to sign mortgages with normality despite the ruling of the Supreme Court

La banca continúa firmando hipotecas con normalidad pese a la sentencia del Supremo

The main banks continue with the mortgage firm with normality, applying the established before it was made public the controversial sentence of last Thursday until the Court
Supreme set a definitive criterion, according to sources consulted by Europa Press. Even so, the mortgage tab of the websites of entities such as BBVA, Bank
Santander or Bankia they remain inactive, since they do not know very well what information to offer the client.

Thus, in most cases signed during these days of uncertainty, it will be the client who will assume the Tax on Documented Legal Acts (IAJD) in the public deeds of loan with mortgage guarantee, while in others it will be established in the provision of mortgage expenses waiting for clarification from the high court. Thus, in case the Supreme Court finally reaffirms its judgment on Thursday, banks should return the tax and change its operation, which could possibly lead to an increase in mortgages.

A possible increase in mortgages

The large bank had already begun to revise its pricing policy in the commercialization of mortgages as an advance to the possible scenario in which it is the financial entities that are responsible for paying said tax.

The high court, whose speaker was the magistrate Jesus
Cudero, interpreted the revised text of the Law on the Transfer of Property Tax (ITP) and Documented Legal Acts (AJD) and its regulation and concluded last Thursday in a final judgment that the borrower is not the taxpayer of the latter tax in the notarial deeds of mortgage-backed loan (as his previous jurisprudence held), but the entity that lends the corresponding amount. However, less than 24 hours later, the Supreme Court decided to convene the Plenary to confirm or annul the jurisdisprudence contained in that judgment, for treating you the decision of a "radical turnaround" and taking into account "its enormous economic and social impact".

A heavy blow to the income statement

If the sector already has a narrow profitability given the environment of interest rates at historic lows or a high commercial competitiveness, among other aspects, having to assume a new tax that until now had been paid by the customer supposes a hard knock to your income statement.

The legal 'void' in which the entities are located comes after the high court has reviewed its criteria with respect to this tax on up to two occasions. The president of the Supreme Court has convened an urgent internal meeting this Monday.

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