I have paid off my mortgage: do I have to discharge it at the Land Registry? How is it done and how much does it cost?

Question

José Manuel Alburquerque · Accepted Answer

You are not obliged to, but it is in your interest. When you pay the last instalment the debt ends, although the mortgage remains registered at the “Registro de la Propiedad” (the Land Registry) until the bank signs a deed of discharge before a notary and that deed is registered. If you do not discharge it, the flat will still appear to be mortgaged and you will have to do it when you want to sell the flat or take out another loan. The cost is moderate, because the notary and the Land Registry apply a reduced scale of fees (“arancel”) to this deed. How it is done Ask the bank for a certificate that the debt has been paid off, known as a zero-balance certificate (“certificado de deuda cero”). The bank signs the deed of discharge before a notary. You can choose the notary, because in contracts with banks the choice belongs to the customer. A return is filed for stamp duty (AJD). The law exempts this deed from the part of the tax calculated on the amount of the mortgage, but it must still be declared. The deed is taken to the Land Registry, which registers the discharge. The bank usually offers its agency (“gestoría”) to handle the whole procedure, but you are not obliged to use it. You can do it yourself or instruct another one. How much it costs The notary. The notaries' fee scale treats this deed as a document with no stated value and sets a fee of 30,05 euros, plus the pages from the fifth sheet onwards, the copies and VAT. The Land Registry. Its fee is calculated on what remains outstanding on the loan, reduced by 90 %. With the mortgage already paid off, the minimum usually applies, which is around 28 euros including VAT. The agency, if you use one. It has no official fee scale, so ask for a quote beforehand. If you do not discharge it As long as you do not sell the flat or take out another loan secured on it, nothing happens, but the Land Registry will still show it as mortgaged. When you want to sell it, the buyer and the buyer's bank will ask you for the discharge, so it is better to do it as soon as you finish paying. The law also allows you to ask the Land Registry to discharge the mortgage on grounds of time bar (“caducidad”), but only when many years have passed since the loan's final due date and subject to requirements that should be checked. It is not a solution for someone who has just finished paying. Selling a flat that still has a mortgage on it is a separate matter. In the rest of Spain, the procedure and the costs are the same.