THE BANKS WILL HAVE TO PAY

So­cial­ist gov­ern­ment set to defy the courts in or­der to save cus­tomers thou­sands of eu­ros over mort­gage tax

Costa Blanca News (North Edition) - - FRONT PAGE - By Dave Jones

THE PUB­LIC out­cry caused by a Supreme Court rul­ing – which re­versed a pre­vi­ous de­ci­sion order­ing banks to pay the sub­stan­tial mort­gage tax rather than their clients – has forced the gov­ern­ment to an­nounce a re­form of the law.

Fi­nan­cial ex­perts stated that the orig­i­nal court de­ci­sion over the ‘im­puesto de ac­tos ju­rídi­cos doc­u­men­ta­dos’ – which ev­ery cus­tomer who con­tracts a mort­gage in Spain has to pay – could cost banks or re­gional gov­ern­ments bil­lions of eu­ros in back pay­ments. The tax in­flates the price of a prop­erty sale for buy­ers, although the amount varies in each re­gion with clients in Va­len­cia, Mur­cia and An­dalucía pay­ing the most, which is 1.5% of the to­tal price of a mort­gage – the high­est amount in Eu­rope.

This means that in Va­len­cia and Mur­cia buy­ers who con­tract a mort­gage of €200,000 have to fork out an ad­di­tional €3,000.

The sys­tem was thrown into chaos at the end of Oc­to­ber when Supreme Court judges ruled that it was the banks that would have to pay.

At the time fi­nan­cial ex­perts stated that this judg­ment could al­low more than one mil­lion cus­tomers to claim back the tax. The share val­ues of Span­ish banks plum­meted fol­low­ing the an­nounce­ment.

The next day, Supreme Court pres­i­dent and Spain’s top judge Car­los Lesmes con­tro­ver­sially sus­pended the de­ci­sion and a com­mit­tee of 28 judges was con­vened to rule on the mat­ter. On Tues­day evening they shocked the coun­try by re­vers­ing the de­ci­sion of their peers – and rul­ing that cus­tomers would have to con­tinue pay­ing the tax.

In re­sponse to the out­cry over the judg­ment, Prime Min­is­ter Pe­dro Sánchez gave a press con­fer­ence on Wed­nes­day to state that his gov­ern­ment will leg­is­late to en­sure that banks have to pay the tax.

He said that dur­ing a Coun­cil of Min­is­ters due to be held yes­ter­day (Thurs­day) af­ter­noon, they would is­sue a royal de­cree to change the law.

This will be pub­lished in the of­fi­cial state bul­letin (BOE) to­day, mean­ing that the changes to the tax will be­come ef­fec­tive im­me­di­ately, although it will have to be rat­i­fied by Par­lia­ment.

How­ever, the ini­tia­tive falls short of ex­pec­ta­tions for mil­lions of mort­gage pay­ers who had hoped they would have the tax re­turned to them.

At the same time, Sr Sánchez an­nounced that his So­cial­ist (PSOE) gov­ern­ment will set up an in­de­pen­dent watch­dog to pro­tect the fi­nan­cial rights of cit­i­zens.

Op­po­si­tion par­ties and con­sumer as­so­ci­a­tions have railed against the Supreme Court judges and demon­stra­tions have been called to­mor­row (Satur­day) at 18.00 out­side the court build­ings in Madrid and ‘all the court­houses in Spain’.

Con­sumers’ rights group FACUA la­belled the judges’ de­ci­sion ‘ab­hor­rent’ and lamented that they had suc­cumbed to pres­sure from the banks.

They called on po­lit­i­cal par­ties and res­i­dents’ or­gan­i­sa­tions to rally their mem­bers to de­fend an ‘in­de­pen­dent ju­di­cial sys­tem in Spain’.

FACUA and po­lit­i­cal party Pode­mos have said that Sr Lesmes should stand down.

Pe­dro Sánchez on Wed­nes­day

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