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Regulation: Court ruling offers Spanish banks brief respite

The recent decision to keep a mortgage-tax burden on clients rather than banks hasn’t improved the longer-term regulatory environment for Spanish lenders – or their own image.


Pablo Iglesias, secretary-general of Podemos

Spain’s Supreme Court ruling on Tuesday that customers, not banks, should continue to pay taxes for taking out a mortgage is only a short-term respite in the general assault on Spanish banks and their image.

Protesters outside the court called for the banks to pay, with Pablo Iglesias – leader of the powerful left-wing party Podemos – criticizing the decision, saying on Twitter: “The banks have won and citizens have lost.”

A previous ruling by the court determining that the banks should cover the tax – paid by the borrower on mortgage loans and ranges from 0.5% to 1.5%, depending on the region – took the market by surprise on October 18.

Customers have had to pay the tax – similar to stamp duty in the UK, and known locally as AJD: Actos Juridicos Documentados – for more than a quarter of a century.


Pronouncements at a news conference on Tuesday by centre-left prime minister Pedro Sánchez, who enjoys only the thinnest of majorities, seem to confirm bankers’ fears that the government will try to change the law anyway, to shift the burden onto banks.

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