Doubts about what is known as the floor clause are common and are generally the subject of claims. This, together with queries about mortgage expenses or the lack of knowledge in all matters relating to Personal Income Tax (IRPF), make them three of the major issues that generate more queries.
In our office of Hinojosa Abogados, we bet for a personalized attention that analyzes case by case, but given that these are very similar topics, we will take advantage of this space to share some general brushstrokes of each one of them in order to clarify the most general and basic doubts.
What we all should know about floor clause, mortgage expenses and Personal Income Tax.
Let’s go by parts differentiating each of these three topics:
a) Floor clause:
At the time of signing our mortgage, or even once signed, we can find that the bank establishes that this is regulated under what is called floor clause. This means that although we have a variable interest rate, we are tied to a minimum percentage even if the Euribor is at some point below this, so that we cannot benefit from this reduction. To give an example, if we had a mortgage with a «floor» percentage of 2% and the Euribor went down to 0.75%, we would continue to pay an interest rate of 2% month after month.
Several judgments of both the Supreme Court of our country and the European Court of Justice determined the illegality of floor clauses for being abusive and not having been properly clarified to users.
Since then, we can claim the return of the money that we have overpaid by two ways that were established by normative regulation. The first one would be through a claim directly to the bank and the second one through the courts. In order to manage both and to know how to raise them, the most advisable thing is the previous legal advice.
b) Mortgage expenses:
If we are granted a mortgage for the purchase of a property, a series of expenses are associated with it and it is important to know which ones are ours to pay and which ones are to be paid by the bank.
A mortgage entails expenses of opening or subrogation of a previous mortgage still existing on the same property, the appraisal of the house. These must be paid by the client.
The bank should assume the expenses of notary, registry and the Tax of Documented Legal Acts.
c) Personal Income Tax:
This is the acronym corresponding to the Personal Income Tax and it acts on the earnings resulting from our work or on the income generated by other goods or investments.
This tax varies according to our annual income, and there are some situations that can lead to a reduction of the percentage that we must pay, such as for example, housing rental contract, contributions to pension plans, to NGOs, trade union organizations, mortgage, being a large family, etc,
In order to be able to pay the IRPF it is necessary to make the income tax return, which in the case of the self-employed implies a quarterly return format.
Monthly we are retained the percentage of IRPF calculated for our personal situation and at the time of making the income tax return we will be able to know if we are entitled to a refund of part of it or on the other hand, a credit to compensate for what has not been contributed.
Whatever your situation is, not only regarding a floor clause but any situation that requires legal advice, you can count on the experience and professionalism of the team that make up the Hinojosa Abogados office, where we will be happy to help you.