Cuban Government Looks Set to Legalise Property Transactions
11 August 2011
The Cuban government promised last week that it would legalise buying and selling property by the end of the year, and if this happens it is possible that Cuba may face a property boom. It is thought that this could result in higher property prices, property taxes and a whole flood of people choosing to relocate. It's also highly likely that Cubans living in other parts of the world will choose to invest their money in Cuban property.
However it's probable that property ownership here will come under tight regulations, and that the market may be suppressed by the government, with most people being limited to owning just one home which will be dependent on full time residency. Even if it is tightly regulated it could transform Cuba, as the opportunity for profits could create a far greater wealth than is currently offered by the small businesses in the country. Some suspect it could result in Havana becoming a city segregated by class due to gentrification of certain areas. Property sales would encourage renovation which in turn would create more jobs, and banking would also profit due to payments coming from buyer’s accounts.
All the property is currently owned by the government, and if it does legalise buying and selling property it would have to hand over homes to their current occupants in exchange for taxes on sales. At the moment the people can only move home by swapping houses, which often results in under the table payments which obviously don't incur any tax. While the regulations are likely to prohibit foreign ownership, many Cubans live in America and the Obama administration allows them to send unlimited amounts of money to relatives in Cuba who would then be able to invest it in property.