Spanish society looks to the Supreme Court, whose judges are meeting today to decide who should pay the tax on mortgages, an issue that has kept banks and customers in suspense for two weeks. A million dollar bill and the credibility of the Supreme Court, the summit of the judicial system, are at stake.
The decision is in the hands of the plenary session of the Administrative Contentious Chamber, formed by 31 magistrates, who do not have to reach a conclusion today. The judges must decide if they confirm, revoke or qualify the sentence in which they established that it is the financial institution, and not the client, who must pay the tax of Documented Legal Acts (AJD) for the writing of the mortgage before the notary. That ruling, which became known on October 18, was a turning point in the doctrine of the Supreme Court and led to a collapse of the stock market, which lost 6,000 million euros that day.
Four years ago
The predictable thing is that the magistrates corroborate the criterion of the judgment in question, whose application to the case it resolved is not reviewable since it is a firm decision. But the plenary itself can study the general doctrine and is expected to define the temporal scope of the decision. This will mark who has right to claimr, which will modulate the "blow" to the bank.
The most expected scenario would be that the new doctrine affect – in addition to the mortgages signed from now on – also all those subscribed in the last four years. This is because the tax of Documented Legal Acts has that prescription period. The rating agency Moody's has estimated the invoice in this hypothesis at 2,300 euros.
If there were total retroactivity -If they could claim all those who have signed a loan to buy a home-, something improbable, the "account" would amount to 29,200 million, according to estimates of the union of the technicians of Finance (Gestha).
The bank points to the Treasury
The financial sector considers that in any case the mailbox of the claims must be Treasury, arguing that it has been the Tax Agency who has collected the tax money, which is assigned to the autonomies. The banks are cautiously awaiting the position set by the Supreme Court, and the consumer associations they questioned the credibility of Justice if the Supreme reversed.
The debate – in a matter that provoked the intervention of the president of the High Court, Carlos Lesmes – is foreseen and could even continue tomorrow. The plenary session was convened by the President of the Contentious Chamber, Luis María Díez-Picazo, who considered it necessary to stop the uncertainty. The magistrates will analyze three sentences: the well-known, which gave the reason to the client, and two others in the same line. The three resolved resources of the Municipal Housing Company of Rivas-Vaciamadrid, a town hall in Madrid governing by Somos Rivas, the brand of Podemos. The tax assessment varies according to the region and the amount of the mortgage, between 0.5% and 1.5%.