Mortgage Expenses

The Distribution Of Mortgage Expenses: New Legislative Change

On this occasion, we are going to summarize how the distribution of the mortgage constitution expenses has been in the case of bank loans in favor of individuals, after a long and sometimes erratic journey of the Supreme Court jurisprudence that began in 2015 and resulted in the Real Estate Credit Regulatory Law of 2019.

The latest news has come with a recent Supreme Court ruling issued on January 27, 2021, on mortgage appraisal expenses.

The new distribution of mortgage expenses

The new change in the distribution of the expenses of the mortgage issued on January 27 of this year will be applied based on the date on which the mortgage was signed. With this change, you will be able to claim a large part of the expenses from the bank.

To do this, we must distinguish whether the mortgages were established before the aforementioned Real Estate Credit Regulatory Law or after its entry into force:

Mortgages constituted after June 19, 2019, when the Real Estate Credit Regulatory Law came into force: The bank must pay almost all the expenses of establishing the mortgage (notary, agency and property registry).

In addition, since November 12, 2018, the bank also has to pay the documented legal acts tax (AJD). The only expense that the bank does not have to pay today is the appraisal of the home, which corresponds to the client because they have the right to choose the appraisal company they want.

Mortgages constituted before June 19, 2019: In December 2015, a judgment of the Supreme Court that resolved an OCU lawsuit established that it was null and void for banks to impose all of the formalization expenses on customers, but did not determine what expenses had to be returned by the bank.

Currently, after the last ruling of January 2021 on appraisal expenses, the matter has been as follows:

  • The banks have to return to the client half of the notary fees and all the management, appraisal and property registration expenses.
  • The client cannot claim the return of the other half of the notary fees, nor that of the tax on certain legal acts (1.5% of the mortgage liability).
  • If you have any questions about it or do not know the Steps and fundamental documents for the inheritance of a home

Home inheritance

We are going to expose the steps and fundamental documents to prepare the processing of an inheritance deed. But if you need personalized and professional advice, we invite you to contact us.

The first thing we must point out is the issue of deadlines, having to differentiate between tax deadlines and civil deadlines that are relevant when a person dies:

A) Tax deadlines.

There is a tax period of 6 months from the death of the deceased, to pay the inheritance tax and the tax on the increase in the value of urban land. After this period, it implies paying a surcharge (and late payment interest if more than a year passes) to the corresponding Tax Agency.

There is the possibility of requesting a postponement of 6 more months of this period (in total one year) but it must be requested within the term of the first 5 months. In this case, only interest would be paid.

After 4 years and six months since the death of the deceased (or since the last communication about the taxable event to the taxpayer), the action of the administration to claim the liquidation of the tax prescribes and no taxes have to be paid.

B) Civil deadlines

On the contrary, there is no deadline to accept the inheritance or to distribute it. The deeds of acceptance and partition of inheritance can be carried out at any time, although we must point out the convenience that they be carried out within a period of six months, established by tax legislation.

If any heir is silent on whether he accepts or repudiates the inheritance, he can be notarized to state whether he accepts or repudiates it.

C) Previous procedures. The death certificate and last wills

The initial documentation, essential, to process any inheritance is the death certificate and the last will.

With the death certificate of the deceased (issued by the Civil Registry and usually delivered by funeral homes), and once fifteen business days have elapsed from the death, the certificate of the Registry of Last Will Acts can be obtained, where it is established if the deceased granted or no will. This certificate can be requested from the notary’s own office.

If the deceased granted a will, the tested succession is opened, requesting the authentic copy of the will from the notary holder of the protocol or from the historical archive, if it is more than 25 years old, and once obtained, we begin the procedures to grant the inheritance deed. From the notary, you can request a copy from any notary.

If the deceased has not granted a will, the intestate succession is opened, and a declaration of intestate heirs must be processed (which replaces the will); and later the procedures to grant the inheritance deed are also initiated.

D) Intestate succession or without a will

a) Order of succession: descendants, ascendants, widower, collaterals up to 4th degree, Autonomous Community.

b) The certificate of declaration of heirs. Documentation:

The precise documentation to process the certificate of declaration of heirs is constituted, in a way extracted by:

Identity document, marital status and current address of all the signatories: applicant (can be any interested party, in the inheritance, but it is not necessary for all to sign it) and two witnesses (they cannot be interested in the inheritance).

The death certificate and Certificate of the Registry of Last Will Acts.

Family book of the deceased, and failing that, certificates of the Civil Registry of his marriage, and birth / death of the children, if applicable.

Identity document of the deceased.

Once the minutes have been signed, a copy cannot be issued until 20 business days after the notification to the Notaries Association. This means that normally the act is signed first and after the aforementioned 20 days the inheritance.

E) The deed of inheritance. Documentation.

A) If all the heirs are satisfied in the distribution, the following documentation is required

Identity document of all the signatories, marital neighborhood and marital status and current address.

Testament/Act of declaration of heirs.

Simple deeds/notes, of all real estate in blue world city Islamabad, whether urban or rustic that was owned or co-owned by the deceased. If they are not found, the notary has procedures to locate them.

Cadastral data of this real estate (or farms), either through tax receipts (IBI) or through a list of cadastral parcels in the case of rustic properties. Likewise, if they are not found from the notary’s office, they have procedures to locate them.

Bank certificates of the existing balances in all entities where the deceased had accounts (either positive or negative) on the date of death.

Tax receipts. When calculating taxes, there may be various reductions in the tax base. To carry out the corresponding reductions, it will be necessary to provide the complementary documentation for your request, among which we can find:

Proof of burial expenses (basically funeral bills), which will not be necessary in cases where it has already been covered by a mutual type OCASO, SANTA LUCÍA, etc …

Proof of last illness expenses.

Certificate of registration of the deceased, to justify the deceased’s habitual residence.

If any heir has some degree of disability greater than 33%, the corresponding proof must be provided.

If there are farms affected by a priority agricultural exploitation, the corresponding proof must be provided.

And in general, all those that are necessary depending on the inheritance.

B) If all the heirs do not agree :

Executor / testamentary splitter accountant.

Dative splitter counter.

Judicial division of the inheritance.

After the deed of inheritance. Model 650.

The inheritance process does not end with the deed of inheritance. Next, and if it had not been done in advance, the inheritance tax will have to be settled in the autonomous community corresponding to the last domicile of the deceased, through form 650 and if urban real estate is awarded in the inheritance, the deed will have to be presented, also, in the corresponding municipalities, for the purposes of capital gains tax.

Once the inheritance tax has been paid and the deed has been submitted for the payment of the capital gain, the deed can be taken to the Property Registry and/or to the corresponding administrative records (such as traffic…).

If you have questions about the inheritance of your home, its sale, and other procedures, you can write to us here and we will answer you as soon as possible. We offer you free professional advice on the inheritance of real estate if you want to sell it.

Save time and money with our team of real estate experts at Tajarat properties on how to claim what belongs to you, you can write us in the comments or send us a message from the contact page.

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