The Supreme Court decides that it is the bank and not the client who must pay the taxes when signing a mortgage

The Supreme Court decides that it is the bank and not the client who must pay the taxes when signing a mortgage


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The Supreme Court has changed its position and has decided that it is the bank and not the client who should pay the tax on documented legal acts in the constitution of a mortgage. In a judgment dated October 16, the high court establishes that it is the lender, and not who receives the loan, who has an interest in registering the operation and elevate it to public deed.

The ruling responds to the appeal filed by the Municipal Housing Company of Rivas Vaciamadrid against a ruling of the Superior Court of Justice of the Community of Madrid June 2017, and annuls an article of the regulation of the tax on property transfers and documented legal acts. Thus, it considers that the expression "in the case of writs of constitution of loan with guarantee will be considered purchaser to the borrower" is contrary to the law.

The "inscribible business", clarifies the sentence, is the mortgage, and the only interested in the elevation to public deed and the subsequent inscription of those businesses is the lender, that only by means of said inscription can exercise the executive and privileged action derived from the mortgage.

The failure has counted with the private vote of magistrate Dimitry Berberoff, who was in favor of maintaining the previous jurisprudence, which established that it was the client and not the bank that had to face the tax. The sentence has also had a concurring vote – accepts the ruling but disagrees at some point in the argument – of the magistrate Nicolás Maurandi.

Although he shares the opinion, Maurandi believes that the aforementioned tax includes not one but two taxes: the lien on notarial documents and the lien on legal acts notarized. When dealing with two different taxes, explains Maurandi, there are also different elements that must be taken into account to determine who the passive subject is and must face it.

In this way, the third room of the Supreme Court modifies its previous jurisprudence and interprets the consolidated text of the law on property transfer tax and documented legal acts, and concludes thator is the borrower the taxpayer of this tax, but the entity that lends the money.

Last February, the Supreme Court resolved in a judgment that the bank did not commit an abuse by charging the client the tax of documented legal acts. The plenary session of the Civil Court discarded then abuse in the application on the borrower of the tax. Different provincial hearings had already published judgments in favor of consumers after claiming the cost of all the expenses of formalizing their mortgages.

Consumers request reimbursement

From the Facua consumer association they urge banks to act responsibly and reimburse users for the amounts they had to pay for this tax along with the interest accrued. In this sense, the association hopes that the Government and the consumer authorities of the autonomous communities will undertake their actions to supervise the actions of the banking sector in this sense and sanction banks that refuse to comply with the law.

The consumer association highlights that the high court takes into account that the registrable business is the mortgage and that the only interested party in the elevation to public deed and the subsequent registration of those businesses is the lender.

From Asufin, which has filed four class action lawsuits to claim the expenses of mortgages, encourages consumers to claim, although its president, Patricia Suárez, calls for "responsibility to the banks", which they should return the amounts to their clients without going to court. Not only will interest and costs be saved, he adds, but "they will regain the trust that is so lacking so that the system works with the same rules for everyone."

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