cubans buying and selling property

[Ken Gargett]

from the new york times...

Cubans Can Buy and Sell Property, Government Says

By DAMIEN CAVE

Published: November 3, 2011

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Cuba to Legalize Private Property

The new rules, which affect residential property only, will go into effect Nov. 10, according to Cuba´s state-run newspaper. The official article said more information would be forthcoming, but the bundle of released details confirm that the new law represents a major break from decades of socialist housing policy. It states that moving will no longer be subject to government approval, that owners will be able to have two homes (a residence and a vacation home) and that purchases, sales, donations and trades will be recognized even in cases of “divorce, death or permanent departure from the country.”

The last item, depending on the fine print, could lead to a wave of sales and migration as Cubans unload property and use the proceeds to flee. But experts and Cuban residents — who have anticipating the law for months — say its implications are likely to be much more far-reaching. In a country defined by limited change for more than 50 years, the law will likely open a Pandora’s box of benefits and risks.

On one hand, billions of dollars in property assets that have that have been essentially unvalued or undervalued and locked in place would be available for sale.

Economists on the island favoring freer-market changes have said the country’s other reforms — making room for small businesses, and private agriculture — have been limited by lack of internal demand, and some experts have argued that home sales could free up the capital needed to jumpstart the island’s seized economy. At the very least, they argue, it will likely lead to a wave of renovation.

“With a housing market, suddenly people have some wealth and that’s a stake in the economy that generates activity,” said Ted Henken, a Latin American Studies professor at Baruch College in New York. He added: “This is a very positive step in the right direction.”

Yet there are also significant social concerns. Mario Coyula, Havana’s director of urbanism and architecture in the 1970s and ‘80s, said that wide-scale buying and selling will lead to a “huge rearrangement” in Havana and other cities as wealthy Cubans move to better areas.

The limit of two houses per owner appears to be an effort to limit the accumulation of wealth, and absentee landlords. But because the island has a shortage of housing supply — with many families and even divorced couples continuing to live together for lack of a better option — critics say that any displacement could raise the prospect of homelessness for some.

Many Cubans have expressed a mix of excitement and fear about the potential for a property market. Some people eager to move said that even if they could sell, they preferred to stick with the established “permuta” system of trading one home for another because it would guarantee that they had a place to live. Others said they would sell immediately, especially if they could leave the country.

Many were waiting to see how much the government would charge them to buy and sell, and that appears to now be established: both the buyer and seller will pay a tax equivalent to 4 percent of the value of the transaction, whether it is a sale or an exchange of homes of equal value.

A major unanswered question in all of this involves the role of foreigners, and Cuban exiles. The law generally requires residency, but the notice in the state-run newspaper, Granma, says the rules will also apply to areas of “descanso or veraneo” — technically rest or holiday zones, presumably resort areas. That raises the possibility of foreign ownership in selected places, perhaps coastal areas, Old Havana and the golf communities that are currently under development with foreign investment.

Cuban-Americans are likely to be very involved. With President Obama’s 2009 decision to allow unlimited travel and remittances for Cuban-Americans, a constant flow of money and visits is now the norm. In exile communities like Miami, there are already efforts under way to funnel money to relatives so that they can buy new homes, or old family homes confiscated after the 1959 Revolution.

Most experts, and Cubans on the island, expect these efforts to accelerate even it is not formally allowed. Indeed, Nov. 10 may amount to the starting gun of an investment race, especially among younger Cuban-Americans who left recently or are the offspring of those who fled after the contentious 1960s.

“I don’t know if they will control the market,” said Philip Peters, an expert at the Lexington Institute in Washington. “But it is certainly going to be the case that the market is going to settle in a way that’s heavily influenced by demand from outside Cuba coming from relatives.”

Mr. Henken provided his own succinct assessment: “This is something that is going to change the structure of how things work.”

[sblevit]

Anyone else think that the primary reason for this "reform" is revenue raising?

[Phillycyclocross]

I wonder if they will give back any of the property the government seized from families during the takeover?

[nubchin]

Those properties seized after the revolution are not in concern because they were considered not necessary for the owner exceeding the frame of residency and since this reform is focused on local residents and foreigners living in Cuba .

Now a resident is allowed one in the place of residence and one more in the country for vacations etc , no more.

[Phillycyclocross]

I'm pretty sure my family felt their property and business was "necessary" when they were forced out of both.

[nubchin]

I'm pretty sure my family felt their property and business was "necessary" when they were forced out of both.

Hey Joey sorry to hear that, and will apologize if I hurt your feelings since you are from the US.

I was telling you the facts but you should know better , at least now you can start sending money to relatives so they can buy the properties or make a better cambio o permuto de viviendas , don't know if that's the exact thing Raul is after, not sure .

There are thousands of stories on this but my mentor in Habana had a "moutain" with some farm fields in the east , plus a few apartments in Habana before the revolucion , now he still lives in the biggest apartment he had but without the rest. I wounder what he would do if the country changes . Will he force the families out the same way ? I doubt that.

[Chunks96ss]

I wonder if the Cubans know about the news of revolutions going on in Africa