The Spanish Supreme Court yesterday decided 15 to 13 in a plenary session of the disputes tribunal that borrowers should pay the tax, as they have done for the last 23 years, reversing a ruling on the 18th October by the same court that banks should pay.
So the decision is final. Borrowers must pay the Stamp Duty on all new mortgages, which could cost anything between €675 and €3,000 on a mortgage with a face value of €100,000, depending on the region where the loan is registered.
The decision is based on how the court interprets the law as it stands, but there is already talk of the Government changing the law to make lenders pay the tax, though of course the cost would simply be passed onto borrowers in higher interest charges or other costs. The relevant law is already under parliamentary review to bring it up to EU standards, so introducing the change would not be complicated, assuming parliamentary support..
The bottom line is Borrowers will always pay the cost of Stamp Duty on new mortgages, whether they pay the tax itself or higher interest costs if the bank pays.
