The Tax on Documented Legal Acts, on which this Thursday has been pronounced the Supreme Court, is an indirect tax regulated by Royal Legislative Decree 1/1993 of September 24. The tax is applied to three types of documents: notarial, mercantile and administrative. As the mortgages are constituted before a notary and are registered, they are therefore obliged to pay this tax.
To calculate the amount, a fixed part and a variable part must be taken into account. The first is usually low, since it derives from the obligation that notarial documents go on stamped paper. Thus, 30 cents per sheet of the document or 15 cents per sheet (which is half of a sheet) will be paid.
The thing is complicated when you reach the variable part since the tax was ceded in 2009 to the Autonomous Communities and varies from one to another. In addition, the value of the loan but the total mortgage liability is not taken into account for its calculation. As this responsibility includes interest for late payment, the costs that would result from litigation due to non-payment and other expenses, is always higher than the amount of money that has been requested, and may reach in very extreme cases even double.
For a loan of 100,000 euros, the mortgage liability can therefore be between 125,000 and 200,000 euros because it depends on the calculations made by each bank. In any case, experts say, the higher figure would be very strange and could only occur in some mortgages prior to 2013, when a law limited the percentages of calculation that entities could apply. Normally the amount is usually specified in the first of the mortgage clauses of the contract and the amount specified there is taken as the tax base.
The provincial territories of Navarra and País Vasco have the lowest rate in all of Spain: 0.5% of the tax base. In common territory, the lowest tax is given in Madrid and the Canary Islands, both with 0.75%. They are followed by La Rioja with 1%, followed by Baleares and Asturias, both with 1.2%. All the others -Andalucía, Aragón, Cantabria, Castilla y León, Castilla-La Mancha, Cataluña, Comunidad Valenciana, Extremadura, Galicia and Murcia- apply a rate of 1.5%.
But that's the general types. Then you have to take into account that many communities have reductions and exemptions for young people, large families, people with disabilities, etc. In some it is also possible to reduce the amount of the tax if it is documented that the property that is the object of the purchase is going to be used as a habitual residence.
Finally, it remains to determine who pays the tax. The law states in that sense that "the acquirer of the property or right will be the taxpayer and, in their absence, the persons who initiate or request the notarial documents". A usual clause that banks introduced in mortgages was that of the obligation of the other party to take charge of the notary costs, which was denounced as abusive by some clients. The Supreme Court has established this Thursday that banks must take charge, which would open the door to Claims by clients. For this purpose, it has modified its previous criterion, which indicated the borrower as a taxpayer. The High Court now understands that it is the lender who is interested in raising the mortgage to a public deed and registering it, so it is the one who must bear the expenses derived from that process.