Photo credit: Lisa Leonardelli
Cuba's property revolution has arrived, as the country allows buying and selling property for the first time.
New laws, which come into effect on Thursday 10 th November, will officially create a Cuban property market, after proposals to legalise real estate transactions were reported in July. The legislation will introduce a brand new housing industry, letting residents exchange, donate and sell real estate for the first time, after years of bartering and swapping homes in illegal street markets.
Property sales have been banned in Cuba since Fidel Castro's rule began in 1959, while any who left the island lost their property to the state. Under the new rules, Cubans will now be allowed to own two homes – a holiday home in addition to a primary residence – although they will have to swear under oath that they don't own any other property, adds Property Wire . A stamp duty of 8 per cent will be applied to all transactions, divided between the two parties, while buyers will have to prove that their funds are legitimate.
Only Cuban citizens will be eligible for home ownership; foreigners will require a permanent residence in Cuba to be able to buy property, but overseas investors will still play a major role in directing the market. Roughly $1 billion currently enters the country every year in remittances from Cuban relatives living in the US. As of Thursday, that number is expected to rocket upwards.
With 11 million people living in the country, many of them sharing space in crowded buildings, the introduction of a housing market is a significant step for Cuba's people, as well as its economy. "I almost feel rich!" one Havana resident told the Guardian , excited to be able to sell her "dilapidated two-bedroom apartment" in two days' time.
Introducing individual wealth into the socialist system is a radical reform from President Raúl Castro, Fidel's brother, who took power in 2006. The move follows previous changes that have included permitting the sale of cars, as well as encouraging people to become self-employed.
As Castro's government debates whether to allow foreigners to directly invest in real estate linked to golf courses and other coastal developments, Cubans and overseas investors are now preparing for major changes in the island republic. Whether the real estate reform upholds Cuba's communist system, as Castro claims, or marks the introduction of capitalism, one thing is sure: Cuba's property revolution has arrived.
Planning to invest in overseas property?
Browse our listings of houses, apartments and other overseas property: