Spanish homeowners are increasingly seeking to reclaim costs associated with securing a mortgage, spurred by recent rulings from the Supreme Court and the Court of Justice of the European Union (CJEU). These decisions have clarified consumer rights regarding expenses historically borne by borrowers.
For years, Spanish banks routinely passed on the costs of formalizing a mortgage – including notary fees, property registry charges, administrative fees, and valuation costs – to the individual taking out the loan. Courts have since deemed this practice abusive, opening the door for homeowners to recover these expenses.
Currently, legal precedent dictates that banks are responsible for covering 50% of notary fees, as well as 100% of the costs associated with property registration and administrative processing. Legal interest accrues on the amounts to be reimbursed. Still, the Impuesto de Actos Jurídicos Documentados (IAJD), a tax on legal documents, remains the responsibility of the homeowner, as legislation specifically assigns its payment to the buyer.
Beyond these standard mortgage expenses, homeowners may also be able to reclaim commission de apertura, or opening fees, charged by banks. The CJEU has ruled that such fees can be deemed null and void if they exceed 1.5% of the loan amount or are not justified by a demonstrable service provided by the financial institution. This means that homeowners can potentially recover these fees if they were not adequately explained or justified at the time of the mortgage agreement.
The process of reclaiming these expenses involves presenting a claim to the bank, often supported by legal counsel. If the bank rejects the claim, homeowners can pursue legal action through the courts. The success of these claims relies heavily on demonstrating that the expenses were unfairly imposed and that the bank benefited from the arrangement.
While reclaiming mortgage expenses is becoming more common, the process can be complex. Legal professionals specializing in banking law are advising homeowners to carefully review their mortgage contracts and gather documentation to support their claims. The potential for recovery varies depending on the specific circumstances of each case, including the date the mortgage was taken out and the specific fees charged.
The IRS has also reminded homeowners of other potential tax deductions related to homeownership, including state and local property taxes, and mortgage interest, though these are subject to limitations. However, expenses like moving costs, homeowner’s insurance, and most closing costs are no longer deductible for most taxpayers. The IRS emphasizes the importance of retaining purchase agreements and records of payments for potential deductions.
homeowners considering modifying their existing mortgage through a process called novación de hipoteca – which allows for changes to the interest rate, term, or outstanding capital – should be aware of associated costs. While the 2019 law shifted most of these costs to the bank, expenses like valuation fees may still apply.
