The Spanish Government has approved the mechanism for returning to consumers the overcharged by the floor clauses.

The most important aspects of this process are that it will be free, will close in less than three months and will have a favorable tax treatment. The mechanism for the return of land clauses, approved through a Royal Decree Law, will be a quick process to recover the wrongly charged money.

Banks must establish within a month, counting from Monday 23, a communication channel for all those debtors know who have had a clause soil, whether they have outstanding as if already canceled. After that, the consumer may claim the entity. The bank will calculate the amount to be returned, together with interest. If the consumer agrees with the calculation, it will be paid in cash or with compensatory measures, such as subtracting the outstanding balance of the mortgage or reduction of future mortgage payments. The process will last a maximum of three months, in which the consumer can’t go to court. In the event that it does, it will bear the costs if the offer determined by the judge is lower than the one offered by the bank at first. Otherwise, the bank will pay.

If the bank is willing to negotiate, it must present the an economic offer to the applicant

If the consumer decides to go directly to the court, but once the extrajudicial procedure has been initiated and until it has been resolved, the parties can’t take any judicial or extrajudicial action.

Those banks that continue to claim that their clauses are valid because they were highlighted in the contracts must give the customer the reasons why they reject their claim.

Regarding tax aspects, the IRPF Law is reformed so that in the case of refund of amounts improperly collected by land clauses are not integrated into the taxable income of the IRPF.

Even so, the returned amounts will be taxed when they were once part of the basis of the deduction for investment in usual housing, or when they were considered a deductible expense. If the consumer deducted these amounts, the complementary declaration will be made without penalty and without interest of delay.

If you signed your mortgage between 2001 and 2012 and your monthly payment has not fallen to the level that the Euribor has done, it’s probably that you have been affected by the floor clause. If so, please contact Ripoll & Mateu Solicitors Mallorca, we advise and represent you to effectively claim the money you overpaid.