Cuba details upcoming law on sale of homes, cars

Posted on Friday, 07.01.11

Cuba details upcoming law on sale of homes, cars
By PETER ORSI
Associated Press

HAVANA -- 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.

http://www.miamiherald.com/2011/07/01/2294435/cuba-details-upcoming-law-on-sale.html