Banks must pay Stamp Duty Tax on Mortgage Loans

The Spanish Supreme Court has recently ruled that the person who must pay Stamp Duty tax due on the registering of the public deeds of mortgage loans is the lending entity and not the borrower.

In a Court Sentence dated 16 October 2018, the Supreme Court modifies its previous Case Law and interpreting the consolidated text of the law on property transfer tax and stamp duty tax, concludes that the borrower is not the taxpayer of the latter tax in the deeds of mortgage-backed loans. But the entity that provides the corresponding loan.

It considers that the transaction subject to registration is the mortgage and that the only interested party in the signing of the public deed and the subsequent registration of this transaction is the lender, who only by means of said registration may exercise the executive and privileged action that derives from the mortgage.

The sentence annuls an article of the tax regulation (which established that the borrower is the taxpayer) because it is contrary to the law. Specifically, it is article 68.2 of said regulation, approved by Royal Decree 828/1995, of May 25th.

So, if you have a mortgage loan in Spain, the Stamp Duty tax amount you paid at the time, can now be claimed back together with other expenses such as Notary fees, Registry fees, property valuation, management fee…

We offer that service, together with other interesting claims related to mortgages in Spain 

María Luisa de Castro

DIRECTOR

María founded CostaLuz Lawyers in 2006 and is the Firm’s Director. María is registered Lawyer number 2745 of the Cadiz Bar Association and is licensed to practice in all areas of law throughout Spain. Working closely with her team, María has developed the firm into one of the most highly regarded and trusted Spanish Law Firms acting for English speaking clients with legal problems in Spain.

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