The Stamp Duty tax (AJD) that CAN be claimed back

Between the end of October and the beginning of November 2008, many of us were watching the “spectacle” that was being staged before us. After decades of maintaining the doctrine that it was the client who received the money who had to pay the AJD tax corresponding to the mortgage loan deeds, the 3rd Chamber of the Supreme Court made a 180º turn to this criterion. This turn of events came as a surprise to the Judges of the same Chamber who did not participate in this decision, which led to the convening of a plenary session to decide which criteria should be maintained for the future. It was a controversial decision that, beyond reasons of social justice or pleasing banks or consumers, simply involved interpreting a set of rules one way or the other. The decision of the Plenary, as is well known, is that the previous criterion, that it was the bank customer who had to pay, would be maintained. However, for the future, this would no longer be the case, but by a government decision of the same week, validated in Parliament, it would be the banks that would be responsible for this tax.

The decision on such a boring subject, why deny it, has been so important because, as many know, in 2015, the 1st Chamber of the Supreme Court ruled that the clause in almost all mortgage loan deeds, which stated that all the costs (and taxes) of the transaction had to be paid by the customer, was null and void as it was abusive.. At first, it was interpreted by many (especially law firms) that the Bank should automatically pay all the costs of the transaction. However, this was not the case. The Court’s decision only implied that, since the clause no longer existed because it was null and void, each expense had to be paid by whoever the applicable law said had to pay it. Hence the importance of the recent decision: if the change of position had been maintained, this could have meant that millions of mortgagors would have had to reclaim what they had paid in AJD for the mortgage deed. This has not been the case.

No doubt this subject, which could be analysed from a political, legal, economic and social point of view, could take pages and pages to analyse. However, today we are going to focus on what may be of most interest to our clients: There is a AJD tax that can (and in our opinion should) be claimed.

We are talking about the stamp duty, which is levied not on the creation of the mortgage in a deed, but on the the introduction of a guarantor or guarantor in a mortgage loan where the entry of such a guarantor or guarantor was not originally foreseen. In English: When we buy a house or a flat from a developer and we take over the mortgage that the developer already had, the bank may require someone to guarantee us. For introducing such a guarantee, when this was not foreseen in the initial mortgage deed between the Bank and the developer, a AJD tax is also payable. This can happen whenever we take out a mortgage, either from a developer as in the example above or when a private individual sells us a house that has a mortgage. And subrogation simply means that, instead of taking out a new mortgage loan for the purchase, we replace the previous debtor in an existing loan, as is often the case, since this form of mortgaging entails fewer costs for both parties.

In the specific case of Andalusia, given that it is a tax ceded to the Autonomous Regions, the current rate is 1.5% on the capital guaranteed or guaranteed, which is higher than the amount of the loan, given that interest and expenses are also covered. Andthis is not a controversial or debatable issue, as was the case with the AJD for mortgage constitution, which is so topical. If we go to anyAJD settlement Form 600, which the agency that works with the Bank must provide us with once all the formalities have been carried out, we can see that the taxpayer appearing in the tax documents is the Bank itself. In addition, both the Law and the ITP-AJD Regulations expressly provide that in the constitution of sureties or guarantees, when it is not simultaneous with the constitution of the loan, the taxable person is the secured creditor, again the Bank.

The majority of courts are currently interpreting the nullity of the clause that imposes the costs on the customer as meaning that it is not a clause that is null and void.The Bank has to pay half of the Notary’s fee, half of the Gestoría fee and the full Land Registry fee for the registration of the mortgage. As the amount of these costs in most cases, even more so in subrogations, is usually small, many people seriously question whether to claim or sue, as although victory is virtually certain, it seems too great an effort for what can be obtained. However, the possibility of reclaiming the AJD tax in such cases makes the idea much more attractive.

We encourage you to let us analyse your specific case and its possibilities. We are experts in Banking and Consumer Law.