Supreme Court Rules That Consumers Pay Some Costs associated With Mortgage Setup

Todays Supreme court ruling. Not all costs should be paid by the clients. We thank one of the group of lawyers we work with for the write up below. The lawyers in question have provided the most accurate description and appraisal of the court ruling.

“The Supreme Court declares that the consumer is the taxpayer in the Tax on Documented Legal Acts
In spite of the judgment of Plenary of the Civil Chamber of the High Court on the mortgage expenses, in which it indicated that the bank had to assume the payment of this concept in its entirety; it did not pronounce on the payment of the Tax on Documented Legal Acts, a question that raises a lot of controversy and whose criterion is not shared by the Provincial Courts that have positioned themselves in this regard. While the Provincial Courts of Malaga, Madrid, Gerona, Vizcaya or Palencia already affirmed the obligation of payment of both the IAJD and the expenses of constitution by the entity, it is now when the Supreme unifies criteria and declares that the taxpayer of the Documented legal acts is the consumer.

The question of this matter, derived from the Superior Court of Justice of Madrid, resides in the mortgage guarantee of the loan . This means that the tax base of the IAJD is greater than if it resided in the borrowed principal, since ordinary and late-payment interest are also included in this way. As we read in Royal Decree 828/1995, of May 29, which approves the Regulation of Transfer Tax and Stamp Duty; the taxpayer will be responsible for the payment of this tax . However, the question of who is the taxpayer (whether the consumer or the bank) has been controversial until the decision of the Supreme Court.

Claim the expenses of incorporation and all the abusive elements of your mortgage
Despite the refusal of the Supreme Court for the claim of the overpaid for the Tax on Documented Legal Acts, consumers can request through the judicial channel the refund of amounts improperly paid for other abusive elements . For example, the expenses of constitution .

It is estimated that the amount paid for this concept exceeds the overpayment for the floor clause. Thousands of clients have been able to recover these amounts thanks to the legal proceedings initiated to demand the nullity of said clause from the banking entities, while there are still many affected by the expenses and the Tax on Documented Legal Acts that have not initiated a procedure. Perhaps for lack of jurisprudence in this regard or for having maximum security when making this claim, we are now at the right time to complain .

These lawyers have a legal team with expertise in Banking Law that will study your case to offer you the best solution to recover the amounts you overpaid for different abusive products: floor clause, IRPH, multi-currency clause, constitution expenses and even commission for opening your mortgage”.

Update: The Supreme court reversed its position on the mortgage set up costs saying that the bank is responsible for paying the tax on documented legal acts

If you wish to consult these lawyers, email: myra@citizensadvice.org.es

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Please note: The information provided is based upon our understanding of current legislation. It is not legal advice but is provided freely to enable you to be properly informed. We recommend that if you are considering taking action, you should seek professional advice.