Cuba details upcoming law on sale of homes, cars

AP News
Posted: Jul 01, 2011 10:24 AM
Cuba details upcoming law on sale of homes, cars

Cuba has announced the first details of a highly anticipated new law meant to loosen rules on the buying and selling of homes and cars, which have been tightly controlled since soon after the 1959 revolution.

The law is still being crafted and will take effect by the end of the year, the Communist Party newspaper Granma reported Friday.

The rules are meant to help ease a severe housing shortage and legalize unofficial title transfers that are commonly used to skirt the state's rigid rules. Under the current system, which allows one-to-one home swaps, thousands of dollars in cash typically pass under the table in complicated black-market transactions that can involve multiple parties and several properties. Some Cubans enter into sham marriages to be able transfer property titles.

Individuals will still not be allowed to own more than one home, and the sales will be taxed, Granma said. Bureaucratic hurdles will be eliminated, meaning transactions can be notarized and completed without having to seek prior authorization. Family members will be able to inherit property even if they are not living at the address.

"A policy has been designed that aims to simplify the bureaucracy for carrying out any kind of act of property transfer," Granma said, "and decrease the prohibitions on the matter, which over the years contributed to the occurrence of innumerable violations."

It added that the changes will do away with "cumbersome administrative procedures and decisions."

"This is very, very good. People here were waiting for this," said 72-year-old Havana retiree Mercedes Limonta. "Until now you had the feeling that your home didn't really belong to you, because you couldn't do as you liked with it.

The law is part of a sweeping package of free-market changes that the government is counting on to perk up a sluggish economy. Guidelines for the changes were approved at a Communist Party Congress in April, but details have been slow to emerge.

The government will also end rules under which only pre-1959 automobiles could be freely bought and sold, and individuals will be able to own more than one vehicle, regardless of the model year, Granma said.

There was no word on tax rates.

Granma said the law was discussed during a meeting last week of President Raul Castro's Council of Ministers. Details had not been announced previously.

The Cuban government has acknowledged that a lack of housing is one of the country's biggest challenges. The shortage reached some 500,000 homes by the middle of the past decade, according to official estimates.

Many Cubans have no choice but to bunk with parents and other relatives even as they start families of their own, with several generations often crammed under a single roof. Divorcees who can't stand the sight of each other frequently continue living together for lack of anywhere else to go.

"Finally! This is a good step forward. Or at least it's not a step backward like we usually do here," said Havana retiree Diego Delgado.

A significant number of islanders have savings or some access to hard currency through remittances from family members and unofficial income from the underground economy, but liquidity will be a challenge for many.

Nor is there a system in place for private lending, though the government has said it plans to establish credit mechanisms for things like starting up small businesses. Details of that have not emerged.

Mirta Clara, a 45-year-old office worker, was less sanguine about Friday's announcement.

"I'm happy that we're moving forward," Clara said. "But it's not all that relevant for me because with the 400 pesos ($17) a month I make working for the state, I'll never be able to save enough to buy a car or a house."


Associated Press writer Anne-Marie Garcia contributed to this report.