Three weeks ago, the Spanish Supreme Court ruled that banks, rather than their customers, should pay the tax on mortgage deeds.
Following the announcement, the stock market began to fall. Twenty-four hours later, the President of the Supreme Court Chamber issued an inexplicable statement reversing the effect of a ruling that had been so favourable to consumers.
This week, the Supreme Court reversed course once again, ruling that customers must continue to pay this tax and that it is up to the legislature to introduce clearer laws. The fact that 15 judges voted in favour of customers continuing to pay the tax, while 13 voted in favour of banks paying it, demonstrates that the issue is legally contentious and that consumers have brought it to the forefront of the debate.
In light of this change in position, public confidence in the justice system has been seriously undermined, creating considerable confusion and legal uncertainty for citizens.
The law governing the Stamp Duty on Documented Legal Acts (Actos Jurídicos Documentados, or AJD) provides that the tax is payable by the purchaser, while subsequent implementing regulations stipulated that it should be paid by the person taking out the mortgage. Those regulations were subsequently annulled, giving rise to the controversy that prompted the claims.
It is important to understand that banks were not the only parties with an interest in this decision. The regional tax authorities were also affected, since AJD is a tax whose proceeds have been transferred by the Spanish State to the Autonomous Communities. As customers had paid the tax to the regional authorities, those authorities would have been responsible for refunding the money and then seeking reimbursement from the banks, potentially creating a serious financial problem for the State.
Taking advantage of the uproar, the Spanish Prime Minister now seeks to take credit for the situation by announcing, through a Royal Decree-Law, that banks will be responsible for paying this tax. However, this change will apply only prospectively and will have no retroactive effect.
Overall, this has been a complete fiasco, forcing us to continue fighting to have these provisions declared null and void, to stop having to pay the tax and to recover amounts already paid. We remain confident that we will ultimately be vindicated, if not in Spain, then once again before the Court of Justice of the European Union, as has happened in previous cases involving unfair terms in mortgage agreements.