Spain Says Banks Might Owe $5.7 Billion in Mortgage Case

(Bloomberg) -- Spain’s government said the nation’s banks may need to foot 5 billion euros ($5.7 billion) in costs if the supreme court rules that they’re responsible for the retroactive payment of a tax on mortgages.

The Supreme Court is debating the details of an Oct. 18 decision that passed the cost of paying a mortgage document tax from home-buyers to the banks. Millions of Spanish homeowners as well as banks are waiting to see if the judges will clarify whether the tax can be reclaimed retroactively and, if so, over what period.

Budget Minister Maria Jesus Montero said in Madrid on Tuesday that the public accounts shouldn’t “have to support this deficit.” She said the 5 billion-euro cost was based on clawing back the tax over a four-year period.

A plenary session of Supreme Court judges began deliberating on Monday at 10 a.m. and are still in discussions over a decision. The nation’s lenders tumbled last month after the Supreme Court panel said that banks should pay the tax on mortgage loans which had previously been passed on to their customers.

A day later it froze the sentence and convened a meeting of its plenary, citing concerns about the ruling’s “enormous economic and social impact.”

©2018 Bloomberg L.P.