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Cuba legalizes sale of private real estate

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Defected to the U.S.S.R.: 04 Aug 2009, 00:45
New Comrade (Say hi & be nice to me!)
Post 03 Nov 2011, 23:27
http://www.npr.org/blogs/thetwo-way/201 ... eal-estate

Quote:
Beginning Nov. 10, citizens and permanent residents in Cuba will be able to buy and sell residential property on the island. The move is one of the more major acts of reforms instituted by President Raúl Castro.

The reform was announced Communist Party daily Granma. According to the AP, the new law limits Cubans to one home, requires that transactions be made through a Cuban bank, so they can be regulated and sales are subject to an 8 percent tax.

As we reported back in April, the decision was made during the sixth meeting of the island's Communist Party Congress and it follows some other decisions toward a free market. The government has allowed the private operation of taxis and allowed private farmers to have more land.

The New York Times reports that those changes haven't meant much because there is poor demand in the island. Cubans simply don't have money. The real-estate change, however, could be significant:

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.


It's seems the Cuban government is beginning to make good on their promises of of Economic reforms.

The question is, what does this and other possible economic reforms hold in store for Cuba? I'm not entirely aware of the current political or social climate of Cuba, hopefully these economic reforms wont take a turn for capitalism à la the PRC. And if not politically, is it possible that the reforms could facilitate the accumulation of capital among certain individuals and give rise to a bourgeois elite in Cuba, leading to the degradation of socialism in a that manner?
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Defected to the U.S.S.R.: 07 Jul 2006, 04:49
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Old Bolshevik
Post 04 Nov 2011, 04:50
This news is very disturbing to me. I don't believe that this is something that should happen in a socialist country. The people who will benefit from this will be the entrepreneurs who will take Cuba in a more capitalist direction, this is the same social class that destabilized Libya. Hopefully, these so-called "reforms" will be reversed soon.
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Defected to the U.S.S.R.: 16 Nov 2005, 17:55
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Post 04 Nov 2011, 16:00
I agree, it's terrible news. In addition to creating a capitalist class that will only drag the country further down, you'll have a segmented society in Cuba where private real estate gets subject to the inevitable house flipping (real estate speculation), inflating local bubbles, while public housing will fall into greater squalor. It would be interesting to know the nature of the debate that led to this decision.

Speaking of which, I saw this article online on Granma:

http://www.granma.cu/ingles/cuba-i/13oc ... turos.html

Quote:
The urban landscape and
future challenges

Félix López

CUBA has begun to change… And in Havana itself it seems as if two capitals are fighting for the same space: a city lulled by time, at times a noisy city of flaking paint, which has survived overpopulation, scarcities of every kind and been neglected; the other, coming to life with new cafeterias, small private restaurants, hairdressing salons, gyms and advertisements of all kinds - ugly or attractive to the eye - informing us of vendors of pirated CD’s, carpenters, mechanics, plumbers, dressmakers, barbers and masseurs…

The faces of these Cubans have taken on a different aspect, revealed by those who worked an unproductive eight-hour day, for an inadequate wage, and are now trying their luck as self-employed workers, a concept which implies taking full responsibility for what that entails: capital, micro-economy, taxes, discipline and legality. But even so, the majority of our 333,000 compatriots dedicated to 181 self-employed activities are putting their hearts and souls into the undertaking to prove to themselves that they can make their own way.

Little by little, other positive new things have burst onto the urban landscape: who could doubt that at the end of the school day, the streets are livelier with the presence of all the high school students who have returned to the city from rural boarding schools. Better recreational options will have to be found for them, an education that will bring them closer to what we always dreamed of and a personal attitude which makes them positive young women and men. Cuba, as those who love the country know, is called upon to preserve everything which made it great, to grow as a nation and improve its economy and forms of participation, so that our sons and daughters feel good within it, are motivated to stay here and grow with this island.

And there are new ways of thinking, discussing and analyzing the country's present and future, although these have not as yet invaded the media with the same force as they have in the heart of society.

The people are talking animatedly about their daily lives, of changes they are experiencing, of the slowness in implementing others, about bureaucrats who are beginning to feel checkmated, of the corrupt brought to justice, of the need for journalism to reflect life more closely and to show us everything. As a friend said, "Revolution means that the people are alive, breathing, that wages are sufficient, that money helps to strengthen spiritual values, that quality of emotions means quality of life, and that sacrifice is not an end but a means."

Others want to participate in this legitimate debate, born of the people, those who hate and scorn the road to independence which Cubans elected more than 50 years ago. All kinds are people are involved in this attempt: 'Cubanologists,' politicos, persons of good faith and even terrorists… Some of them are predicting Cuba's failure, others are daring to demonize what we have applauded here as necessary. One of these, with access to the major media, has launched a "theory" to demonstrate our abdication: "Self-employment is creating a petty bourgeoisie in Cuba, reverting to the politics of the ‘gray years,' and going against Lenin's warning that the petty bourgeoisie is socialism's most dangerous enemy."

So it turns out that the enemies of the Cuban Revolution are more Leninist than Lenin. They are the ones who were thrown into confusion on December 18, 2010, when President Raúl Castro destroyed in just one speech their dream of the restoration of capitalism in Cuba, "Planning and not the free market will be the distinctive feature of the economy and the concentration of ownership will not be allowed…" Those who are set on demonizing and judging self-employed workers have chosen a road which, in addition to being mean spirited, is laughable, given that it is unsustainable. Cuba is counting on them as one of the driving forces for future development. And their presence in the urban landscape has come to stay.


The last paragraph really resounds of creeping perestroika.
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Defected to the U.S.S.R.: 07 Oct 2004, 22:04
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Post 04 Nov 2011, 17:36
Marshal Konev wrote:
The last paragraph really resounds of creeping perestroika.


You're right. Having read a lot of period literature from the perestroika period, it was always noted by even the most radical of reformers that they were fighting for a renewed socialism, and that their conservative opponents were the 'enemies of renewed socialism'. Lenin and Leninism were also important catch words. It's odd that this process is repeating itself, given the fact that Cuban academics have devoted much effort to understanding and explaining the reasons for the destruction of socialism in the USSR.

In the pre-reform USSR, there was always a small group of racketeers who built up their capital through the black market. During perestroika, this group effectively laundered their money through the new opportunities for cooperatives and small businesses, and together with the criminal underclass began taking over the economy. When the command administrative planning system, which included party control to ensure smooth movement of goods and resources, was deliberately destroyed in 1988, this group gained even more power. By 1991 they were capable of buying some of the countries largest enterprises. It is because capitalism in the former USSR was built on criminal money that it has been so brutal, unrestrained, and destructive.

In Cuba, the situation appears to be of a dual nature. There are the racketeers in the black market, but there is also a pretty big group of people (including people like taxi drivers and hotel workers) with foreign capital. Obviously this capital accumulates into the hands of a small group, and this group now has the interest -and a growing ability- to take tangible capital into their own hands. Once a capitalist class with serious money is born, it will be in their natural interest to destroy socialism and to seize the entirety of the country, rather than to be restricted to their small holdings. With the help of government corruption and systemic disorganization, these people can bribe their way into purchasing the country's main economic resources for a pittance, and the criminal capitalism Russia has experienced will come to Cuba. Given that Cuba is in such close proximity to the US, the destruction of socialism would mean a return to Godfather 2-style carving of the country by foreign gangsters (whether formally legitimate or not), and an influx of gangs and drug wars that could turn the country into northern Mexico. The country already has problems from sex tourists and other ignorant and disrespectful jerks coming in from North America and Europe, and the ability to purchase housing there could mean some foreign 'investor' coming in and buying out entire neighbourhoods and turning them into vacation communities for rich foreigners.
"The thing about capitalism is that it sounds awful on paper and is horrendous in practice. Communism sounds wonderful on paper and when it was put into practice it was done pretty well for what they had to work with." -MiG
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Defected to the U.S.S.R.: 07 Oct 2009, 20:08
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Post 04 Nov 2011, 23:33
Expect to see more of these reforms in the future as Cuba seeks to liberalise their economy in the image of China rather than the 'shock therapies' of the former USSR, and will attempt to remove those who oppose their reforms. Socialism in Cuba is in grave danger and could be destroyed by the current elite, will enrich themselves from privatising state assets. Cuba will probably remain an illiberal regime, rather than a liberal democracy that the US wants to oppose on them. Cuba will also seek to trade more with China and Europe than with the US to prevent themselves from becoming a de facto colony of America.
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Defected to the U.S.S.R.: 21 Dec 2004, 23:53
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Post 22 Nov 2011, 21:01
First off, sorry for the late response. Several folks PMed me asking more my opinion on the reforms and work has just consumed a lot of my time. These reforms weren't as shocking as when they first were announced in September of 2010. I'd suggest this article that I posted several times, here. The same problems still affect Cuba and they are trying to reform the situation to keep the Revolution alive; however, they have seen how reforms have played out in the USSR and PRC and are conscious of the dangers. For most of the 1990s there were reforms and the removal of reforms. The slow pace of the reforms and the inclusion of the mass organizations with local debates means that the Cuban people aren't taking chances.

Granma wrote:
More flexible housing options
• Details of new Decree-Law establishing procedures for the transfer of ownership

Yaima Puig Meneses and Anneris Ivette Leyva

MONTHS ago, when the Political and Economic Policy Guidelines debate began, proposals addressing the complicated process associated with housing transactions were among the most recurrent. At the time, many people were asking, for example: Why restrict the transfer of a dwelling from one person to another? … What can the country do so that these transactions can be completed without so many formalities and so much bureaucratic paperwork?

The new law is designed to fulfill Guideline 297 from the 6th Party Congress, which states, "Establish the buying and selling of dwellings and facilitate other means for the transmission of ownership (swapping, donation and others) between individuals." It is also part of updating of the country's economic model, which implies the development of a coherent policy to simplify these transactions and limit the irrational prohibitions existent which, over the years, have become conducive to violations.

Thus, following a thorough analysis and a study of current legislation and regulations, Decree-Law 288 goes into effect November 10, to regulate and simplify transactions transferring ownership of homes for Cuban citizens residing in the country and permanent residents from abroad.

In order to provide our readers with more details on the subject Granma interviewed Oris Silvia Fernández Hernández, president of the National Housing Institute (INV).

"First, we should clarify that with Decree-Law 288 we are fundamentally modifying Chapter V of the General Housing Act which refers to the transfer of ownership of dwellings through sales, donation, swapping and adjudication, this latter referring to instances in which the owner dies or definitively leaves the country and in the event of an uncontested divorce," she explained.

Among other objectives, the new legislation is designed to ensure that proprietors who want to dispose of a dwelling can do so as they wish, without the need for any authorization from the Municipal Housing Authority, as has been the case to date. Thus, the citizen's right is granted by law. It seems timely, additionally, to indicate that these property transfer transactions are to take place in the presence of a notary public.

The fundamental premise is maintained that a person can only be the proprietor of one dwelling as a permanent residence, and one other, as a weekend or summer home, the INV President explained.

According to Fernández Hernández, this legislation, in addition to contributing to the resolution of the country's housing problems – given that voluntary moves can be arranged between individuals – eliminates a body of administrative authorizations and legal requirements which, over the last several years, have led to corruption.

The requirement of paying a transfer of property and inheritances tax is maintained, while a personal income tax specifically for income based on the sale of a dwelling has been incorporated into the law. In both cases the tax represents 4% of the value of the dwelling.

What is required to transfer ownership of a dwelling?

"First, it is important to emphasize that for a person to complete any of these transactions, he or she must be the rightful owner of the dwelling and reside in Cuba. As a prerequisite, the dwelling must be registered in the municipality where it is located, in the Register of Property, and the deed must be up to date, including the tax assessment."

When is the deed updated? What steps must be taken to do so?

"The deed should be updated if it includes errors or omissions, or does not accurately reflect the tax assessment, measurements or adjoining areas. The deed should also be amended if any interior construction work is done, modifying the characteristics of the dwelling and invalidating the description in the deed."

How is the tax assessment obtained? Does this affect the price of the dwelling in the event of its sale?

"The tax assessment is obtained from the Housing Department records and transactions office. If a municipality does not have such an office, interested parties should call upon the Municipal Housing Authority. Once the proprietor has submitted the request, the community architect has a 30-day period in which to complete a report including the assessment.

"As another element, it would be good to clarify that it is not required that the price of the dwelling necessarily coincide with the value indicated in the assessment. The price is agreed upon by the parties involved in the sale. The price is set by these individuals. The value reflected in the tax assessment is used to calculate the taxes to be paid, if the price declared by the buyer and seller is less than this amount."

What is the advantage in declaring the actual purchase price?

"Above all, this provides legal protection for both parties. For the seller it serves to validate the income received, establishing a legal record of the amount, while the buyer has a legal record of the money paid for the dwelling, useful in the event that some problem should appear in the future."

BUYING, SELLING, DONATING & SWAPPING

If a sale is to be completed, the seller is expected to show that all debts related to the purchase of the home have been paid in full. Likewise, the buyer is obliged to inform the notary that he or she is not the proprietor of another dwelling as a permanent residence, Fernández said.

Are there any other specifics required during the sales transaction?

"Another new element we should emphasize is the form of payment required to complete the transfer of funds, as established by the buyer and seller. In this case, the buyer is obliged to deposit the amount of money agreed upon in a local bank, in exchange for a cashier's check which is then delivered to the buyer in the presence of a notary public, to formalize the sale. The notary, in turn, records the number, the date and name which appear on the check.

It's important to clarify that the bank transaction is not meant to further complicate the process, nor should it be seen as a limitation or as interference on the part of the state. The purpose is to provide parties with legal protection for this investment. Likewise, it eliminates the need to handle large sums of money. The cashier's check can only be cashed by the seller, at the time he or she chooses, within 10 days."

What taxes are to be paid in this case? Who is required to do so?

"Both the buyer and the seller will have to pay a 4% tax on the amount agreed upon as the price for the dwelling. The difference lies in that the former pays the Transfer of Property and Inheritances Tax, while the latter pays Personal Income Tax."

When the sale is formalized in the presence of a notary, the seller must sign a statement that he or she fully understands the consequences the transaction implies for relatives and cohabitants – if they exist – who are protected by law. A similar procedure will be followed in the case of donation, Fernández Hernández explained.

The donation of a dwelling to any person the owner may choose can be formalized as well. This transaction is also taxed accordingly.

The new regulations also simplify the paperwork required of those who opt for the well-established mechanism of swapping homes, known as permutas. Prior authorization from the Municipal Housing Authority is no longer required, as we have already mentioned, and in these instances the concept of disproportional value of the dwellings exchanged, given their differing value or characteristics, is also eliminated.

If the parties involved so decide, they may declare a monetary compensation to accompany the swap, which will be recognized by law, and must be established in CUP, in the presence of a notary public, in order to guarantee legal protection in the event of future problems. Again, with the purpose of offering greater security, as in the case of a sale, a cashier's check issued by a local bank will be used.

In the case of a swap transaction, each party must pay taxes on the Transfer of Property and Inheritances based on the value of their new homes. If one of the parties receives compensation, this amount will be added to the value of the dwelling acquired for the purpose of calculating the tax.

WHAT ABOUT ADJUDICATIONS?

The ownership of dwellings can also be transferred as a result of a judicial ruling. One variant would be the death of the proprietor, in which case heirs have the right to take ownership of the dwelling through the courts, whether or not they reside in the home, as long as they do not own another permanent residence.

"It should be clarified that previously, if the heirs did not live in the house with the proprietor, they could not claim ownership. Now they will have the legal right to the dwelling even when other people live there. In the event that there is a will, the beneficiary identified also has a right to the dwelling, even if he or she is not a relative or a cohabitant," Fernández Hernández emphasized.

According to the new legislation, dwellings owned by individuals, who have definitively left the country without properly disposing of their property, may be awarded to others in the following order of priority: spouse, former spouse or relatives of the proprietor to the fourth degree of relation – children, grandchildren, parents, siblings, aunts or uncles, nieces or nephews and cousins.

In the event that none of these beneficiaries acquire the dwelling, the occupants not among the aforementioned, who have lived in the home for at least five years, will also have the right to seek ownership of the property.

Fernández Hernández adds, "If before leaving the country, a proprietor has paid all debts on the home, the new owner is not required to do so. If, however, outstanding debts remain, the new proprietor is responsible for their payment.

In any event, anyone who acquires ownership of the home will be required to pay the Transfer of Property and Inheritances taxes, based on the current value of the dwelling."

Another possible adjudication comes into play in the event of divorce proceedings during which the spouses mutually agree, in the presence of a notary, as to the disposition of the dwelling acquired during the marriage, without having to appeal to the courts for a ruling.

Thus, with these new legal provisions coming into effect, individual citizens will be able to make more decisions about the disposition and acquisition of homes, but they will also have more responsibility for them. State institutions, for their part, are charged with ensuring that the regulations are fully respected and that functioning outside of the law is ended.


Dzerzhinsky wrote:
And if not politically, is it possible that the reforms could facilitate the accumulation of capital among certain individuals and give rise to a bourgeois elite in Cuba, leading to the degradation of socialism in a that manner?


I haven't read anything on foriegns purchasing homes in Cuba and that is a large blank that I haven't been able to fill in. Homes are not considered private property (as in a means of production.. except for when one rents homes) and I haven't read anything to suggest that these reforms will lead to a new class in Cuba.

Misuzu wrote:
The people who will benefit from this will be the entrepreneurs who will take Cuba in a more capitalist direction, this is the same social class that destabilized Libya.


I'm less familar with the reforms in Libya than I should be; however, Cuba does have the benefit of knowing that given the chance the USA will exploit any chance to overthrow the Revolution. Libya is only the most recent case were Cuban have seen the Empire overthrow a progressive movement.

Marshal Konev wrote:
The last paragraph really resounds of creeping perestroika.


There is no denying that; however, to be fair Khrushchev stated he was returning to Lenininsm after Stalin, Brezhnev stated he was returning to Leninism after Khrushchev, ect. I'll try to find an article but since the fall of the USSR many in Cuba have been engaging in debates over the way forward. While it would be foolish to believe that there aren't party members who wish to follow a Chinese model there are also those who wish to return to a more Che oriented thought.

soviet78 wrote:
and the ability to purchase housing there could mean some foreign 'investor' coming in and buying out entire neighbourhoods and turning them into vacation communities for rich foreigners.


As previously stated, I don't know how these reforms affect the ability of foriegn investors to purchase Cuban homes. The articles I have read haven't spoken on how this affects foriegn ownership. I'm still under the impression that places need to have 51% of the ownership be Cuban.
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Defected to the U.S.S.R.: 10 Jun 2013, 03:25
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Post 11 Jun 2013, 01:33
It's very disappointing. I doubt Fidel supports this. His brother doesn't have the same view of humanity. I mean, just look his fancy suit.
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Defected to the U.S.S.R.: 21 Dec 2004, 23:53
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Post 20 Jun 2013, 04:17
And the main picture of Fidel on Wiki is him wearing a suit.
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Defected to the U.S.S.R.: 07 Oct 2004, 22:04
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Post 20 Jun 2013, 14:55
NewSovietMan, that suit doesn't look very fancy to me -it actually looks pretty well worn. Besides, it's pretty ridiculous to judge a politician by his clothes. They have somewhat of an obligation to dress well as representatives of their country. Red Rebel, do you have any new information on how things are progressing in Cuba in this area?
"The thing about capitalism is that it sounds awful on paper and is horrendous in practice. Communism sounds wonderful on paper and when it was put into practice it was done pretty well for what they had to work with." -MiG
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Defected to the U.S.S.R.: 07 Oct 2009, 20:08
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Post 30 Oct 2013, 21:05
Suits aren't even that expensive these days and well-groomed person can wear a cheap suit with style.
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Defected to the U.S.S.R.: 22 Oct 2004, 15:15
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Post 03 Nov 2013, 14:26
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Look at these bourgeois shits in their fancy suits.
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Defected to the U.S.S.R.: 01 Mar 2011, 14:10
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Post 03 Nov 2013, 23:16
Hoxha had style.

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Post 04 Nov 2013, 09:33
While I agree with the point you're making, a white suit is still somewhat different than the cheap worn-out jackets-with-shirts of those KKE people.
"Don't know why i'm still surprised with this shit anyway." - Loz
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Defected to the U.S.S.R.: 06 Dec 2009, 23:17
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Post 04 Nov 2013, 11:30
It's still better than the stereotypical communist look ( like Fidel's military jacket, Stalin's uniforms or Mao suits ) or those horrible jackets Chavez used to wear. Although yeah, white suits are horrible in general, i think only pimps wear that nowadays.
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Defected to the U.S.S.R.: 12 Jun 2006, 02:14
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Post 04 Nov 2013, 13:29
A white suit is typical of the caribean weather. There's really no difference with other suits.


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Defected to the U.S.S.R.: 18 Apr 2010, 04:44
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Post 04 Nov 2013, 14:29
The average mobster in America used to wear suits that were ten times fancier than anything Hoxha or Tito ever wore. Unless Castro starts sporting major bling and a harem of groupies at every appearance, I'd look for other means of criticism.
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Defected to the U.S.S.R.: 07 Oct 2004, 22:04
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Post 04 Nov 2013, 17:02
Look at the suit guys; it looks well worn and a bit wrinkled; looks like Raul can't even get decent dry-cleaning. I'll admit, there is something to be said about communist leaders' minimalist fashion sense. Andrei Gromyko got a pinstripe suit in the early 80s, and based on photographs of his appearances in the USSR and abroad, wore it until he retired and died. Mikhail Suslov was so unconcerned about his appearance that he wore the same old coat for decades, along with galoshes, to the point where he was nicknamed 'galosh', and the Politburo got together one day to chip in to buy him a new coat.
Stalin is widely known to have only had a few outfits and a couple old pairs of boots.

Still, that doesn't mean that I would turn away from a communist leader just because he likes to dress well, according to contemporary fashion standards. What's important is the content of a person's mind, and their ability to successfully fight for their beliefs, not what they happen to like wearing.
"The thing about capitalism is that it sounds awful on paper and is horrendous in practice. Communism sounds wonderful on paper and when it was put into practice it was done pretty well for what they had to work with." -MiG
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Defected to the U.S.S.R.: 14 Jul 2008, 20:01
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Post 04 Nov 2013, 20:20
Ted Grant carried his stuff in plastic bags.
"Don't know why i'm still surprised with this shit anyway." - Loz
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Defected to the U.S.S.R.: 06 Dec 2009, 23:17
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Post 05 Nov 2013, 00:48
Anyway that's probably a good move that will surely revitalize the construction industry in Cuba which is notorious for being run-down, as even Havana looks like shit with dilapidated buildings everywhere. People will take care of their houses and other property better than the bureaucracy which is slow and incompetent and corrupt everywhere but particularly in Cuba. Though i imagine there might be huge disturbances if the state completely loses control over the situation, with unscrupulous businessmen working together with bureaucrats throwing people out of their homes and so on.
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Post 23 Feb 2014, 21:17
There are definitely legitimate criticisms to make of some of Cuba's new economic policies, particularly private real estate. It sounds to me like an easy gateway to foreign exploitation.

But people are really attacking Raul for his suit? It's extremely wrinkled and frumpy-looking, plus the lack of contrast between the tie and the suit doesn't really tell me he's trying to draw attention to his outfit. He looks less like a Wall Street executive and more like a professor who hobbled together random clothes from his closet.
Compare it to, say, anything worn by Mitt Romney ever at any point in his life.
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