BANKS LET OFF THE HOOK

Making customers pay mortgage tax stamp duty 'is not abusive', says court

BANKS in Spain sighed in relief on Wednesday after the Supreme Court ruled in their favour regarding mortgage contract clauses that obliged customers to pay the mortgage tax stamp duty (Impuesto de Actos Jurídicos Documentados).

Had the national court ruled in favour of customers, as many provincial courts had, banks would be facing a stream of demands that would have amounted to millions of euros in payouts.

The civil section of the Supreme Court which has made this ruling is the same that sentenced that it was abusive for the customer to pay all the expenses incurred in formalising a mortgage contract.

That previous ruling prevails, but cannot be applied to the Impuesto de Actos Jurídicos Documentados (mortgage tax stamp duty).

Until this week, and based on the previous ruling, mortgage payers had been filing lawsuits at provincial courts demanding banks pay back all the amounts charged for formalising a mortgage - notary fees, surveying costs, etc - including the mortgage tax stamp duty.

Some courts had ruled in favour of customers, others against, and others had excluded the mortgage tax stamp duty. For this reason the issue was taken to the Supreme Court, which released its ruling this week.

Customers can continue to claim for the other expenses directly with the bank's customer services, or if turned down, via litigations. How- ever, this new ruling will mean all claims including the mortgage tax stamp duty will be turned down.

Law firms bonanza

When the initial ruling was made in December 2015, specialised law firms and consummer associations filed an avalanche of lawsuits offering mortgage payers the chance to claim back thousands of euros in each case - including the mortgage tax stamp duty.

In the case of an average mortgage of around €150,000, the total formalisation expenses (including the mortgage tax stamp duty) would exceed €3,000.

Now the mortgage tax stamp duty has been ruled out of the equuation, the pay-backs customers will be entitled to will be around 10% of that figure - an average €300 per customer.