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Spain’s Supreme Court makes yet another ruling on who should be responsible for paying mortgage tax.

Just when we thought the Spanish mortgage tax fiasco was over, the Supreme Court has just introduced yet another legislation regarding the Impuesto Sobre Actos Jurídicos Documentados (AJD) – a tax paid on certain mortgage documents signed before a notary – overruling the new law introduced by the government last November.

Finally after much debate changing and re-changing laws, the government ruled in November that banks would be liable for the mortgage tax and mortgage holders could apply for a refund. If the 8 million mortgage holders in Spain were to demand the fee back, the banks would have to pay out around €24 billion, working on an average AJD fee of €3,000 per loan, according to consumer organisation Asufin.

However, to add yet another twist to the saga, the Supreme Court has just decided that the new law introduced by the government was hurried through the courts and, to much of the banks relief, mortgage holders who paid the tax prior to the governments new ruling, will NOT be able to claim back the fee, which in Andalucia accounts for around 1.5% of the mortgage guarantee.

Another ruling also indicates that notary costs regarding new mortgage loans should be shared equally by both the banks and the mortgage holder – which means although they will now once again have to contribute towards the tax unlike the government ruling, it would still put borrowers in a better position than they were in before the saga began – when they were 100% responsible liable for paying the AJD.

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