The payment of Property Transfer Tax and Stamp Duty have become the responsibility of the mortgage lender.
“Spaniards will never again pay this tax,”
“Spaniards will never again pay this tax,” vowed prime minister Pedro Sánchez as he announced the amendment, following weeks of contradictory decisions by Spain’s Supreme Court.
In mid-October, a panel of the Court’s judges said that the tax should be paid by the lenders, because, they argued, they have an interest in obtaining a notarized certification of the loan. Days later, the Court announced this would reviewed by all the judges who sit in the administrative division.
After two days of deliberations, 15 of them said the borrower should pay while 13 said it should be the banks. This prompted Sánchez to move quickly and introduce legislation which favours the borrowers but will cost the banks an estimated €640 million a year. Speculation is therefore rife that the banks may be tempted to pass on the cost through higher commissions or interest rates
The new law is not retrospective so any home owner who paid the tax before the change came into effect cannot claim it back from the lender. However, the socialist government’s alley in government, Podemos, says it will press for lenders to refund past fees which could cost the banks up to €5 billion.
The tax in question generates about €8 billion a year for Spain’s regional governments who collect it. Sr Sánchez also announced plans for a new law creating an independent consumer protection agency aimed at finance sector clients.