- Home » Expat News » Expats in Spain could get windfall on property purchase taxes
Expats in Spain could get windfall on property purchase taxes
| Published: | 25 Oct at 6 PM |
Want to get involved?
Become a Featured Expat and take our interview.
Become a Local Expert and contribute articles.
Get in touch today!
Become a Local Expert and contribute articles.
Get in touch today!
In Spain’s Murcia region, expats who took out mortgage loans over the last four years could be in for a tax refund.
Following a Supreme Court ruling announced last week, some 30,000 buyers in total could be in for a tax refund. The judge’s decision reversed a former ruling that the ‘tax on judicial acts’ levied on property purchasers with mortgages over the past 23 years should, in fact, have been paid by the banks which provided the loans. Unsurprisingly, the ruling has caused confusion and uncertainty both in leading banks and with property buyers themselves. It hasn’t helped that a subsequent report stated the decision will be examined via a general meeting of 31 judges in the relevant court division.
The reason behind the second meeting has its roots in the economic aspect of the recent ruling, which caused chaos on the Madrid Stock Exchange as investors sold bank shares, wiping some 4,000 million euros off shares in six major Spanish banks. Investors were rightly concerned about the effect on the banks of being forced to make massive paybacks to mortgagees. The results of the judicial review are due to be announced on November 5.
In a side effect to the entire mess, Spanish banks have seen a dramatic slowdown in the number of signed mortgages, due mostly to property purchasers’ reluctance to pay the tax until its legal status is either confirmed or denied. However, those who’ve paid the tax during the past four years, many of whom may well be expatriates, will still benefit, as Spanish law states responsibility for such irregularities expires after that period of time.
Even so, the amount able to be claimed back in Murcia is an estimated 64 million euros at an average of 1,200 euros per purchaser. Some sources are reporting the time scale for valid claims could well be extended to 15 years, with the pay-out from Murcia’s banks alone totalling 977 million. Real estate agents in the region aren’t happy about the development due to fears the property market might be affected due to unclear loan conditions.
Following a Supreme Court ruling announced last week, some 30,000 buyers in total could be in for a tax refund. The judge’s decision reversed a former ruling that the ‘tax on judicial acts’ levied on property purchasers with mortgages over the past 23 years should, in fact, have been paid by the banks which provided the loans. Unsurprisingly, the ruling has caused confusion and uncertainty both in leading banks and with property buyers themselves. It hasn’t helped that a subsequent report stated the decision will be examined via a general meeting of 31 judges in the relevant court division.
The reason behind the second meeting has its roots in the economic aspect of the recent ruling, which caused chaos on the Madrid Stock Exchange as investors sold bank shares, wiping some 4,000 million euros off shares in six major Spanish banks. Investors were rightly concerned about the effect on the banks of being forced to make massive paybacks to mortgagees. The results of the judicial review are due to be announced on November 5.
In a side effect to the entire mess, Spanish banks have seen a dramatic slowdown in the number of signed mortgages, due mostly to property purchasers’ reluctance to pay the tax until its legal status is either confirmed or denied. However, those who’ve paid the tax during the past four years, many of whom may well be expatriates, will still benefit, as Spanish law states responsibility for such irregularities expires after that period of time.
Even so, the amount able to be claimed back in Murcia is an estimated 64 million euros at an average of 1,200 euros per purchaser. Some sources are reporting the time scale for valid claims could well be extended to 15 years, with the pay-out from Murcia’s banks alone totalling 977 million. Real estate agents in the region aren’t happy about the development due to fears the property market might be affected due to unclear loan conditions.
Comments » No published comments just yet for this article...
Feel free to have your say on this item. Go on... be the first!
