New tax ruling on Spanish Stamp Duty on mortgage loan term extensions
23 August 2021
We inform you that the Spanish Tax Authorities, in their recent tax ruling (V2305-21 dated 16 August 2021), have clarified the calculation of the taxable base of the variable amount of the Stamp Duty that may accrue as a result of mortgage loan term extensions. Please remember that, by virtue of Law 2/1994, of 30 March, on Subrogation and Modification of Mortgage-secured Loans, novations of mortgage-secured loans consisting of loan term extensions may benefit from the Stamp Duty exemption, provided that the creditor is a financial institution. Thus, a sensu contrario, in those cases in which the creditor is not a financial institution, the aforementioned tax will trigger.
According to the Spanish Tax Authorities, in this case the taxable base of the Stamp Duty will be made up of the overall amount of the interest that the debtor is obliged to pay in excess due to the extension of the term of the mortgage-secured loan, plus the amount of the expenses derived from such extension.
The calculation of the taxable base of the Stamp Duty in mortgage novations has always raised many doubts. In this regard, traditionally, the Spanish Tax Authorities had considered that, in any mortgage novation subject to and not exempt from Stamp Duty, the taxable base was the amount of the total secured liability established when the mortgage was originally granted. Subsequently, both the Spanish Supreme Court and the Tax Authorities, in this case, amending the previous criteria, established that the taxable base should only be the amount of the economic content of the financial clause or clauses subject to novation.
However, in practice, doubts remained as to how to calculate the economic content of the clause relating to the loan term when this was extended. Now, with this long-awaited tax ruling, the uncertainty that existed in this respect has finally been eliminated.
We hope this information is of interest. Should you need any further clarification or additional information, please do not hesitate to contact us.
