It Won’t be Easy for Cubans to Buy or Sell Houses
A few days ago, the newspaper Granma announced that by the end of 2011, Cubans would be able to buy and sell homes. Despite the buzz caused by the news – according to the announcement, the steps for conveying property legally would be more flexible – many people still have misgivings.
According to the newspaper, “the payment of the price agreed upon between the parties will be made through a bank branch.”
“I don’t like that. It seems strange that they’re now making it so easy,” says Manolo, 40, who works filling cigarette lighters. He distrusts the requirement to open a cash account at least for the buyer, and adds: “What worries me the most is having to justify the money.”
The government only recognizes as legitimate income from employment, remittances and inheritances. “How do I show the money my brother sends me through ‘mules’ or one of those private agencies that are not recognized by the government?” asks Manolo.
Indeed, for those who can’t certify the legality of their inflows of money, there is the risk of being prosecuted administratively for unjust enrichment, because the state can presume that the deposits are the result of theft, diversion of state resources or activities on the black market.
In these cases, they confiscate homes, cars, bank accounts, etc., acquired over a period of time that may be prior to when the inherited wealth was verified, which allegedly enriched the individual and the close relatives who can’t justify the legal origin of their goods.
Moreover, taxes are also on the list of concerns of those who are obliged to create a bank account to buy a home. The seller must pay personal income tax, while the buyer has to pay for the transfer of property.
And the tax rates make people uneasy. On the black market, real estate is priced in convertible pesos. The price of a stone house with a room, kitchen and bathroom, located on the outskirts, can run between 5,000 and 6,000 dollars in hard currency. In local currency, by which taxes are calculated, it would be between 125,000 and 150,000 Cuban thousand pesos.
The more anxious analyze the situation by comparing it to the taxes on private businesses. “If someone who by the sweat of his work makes more than 50,000 pesos has to pay a 50 percent income tax, can you imagine how much it will be for selling a house?” commented the clerk at a privately-owned cafe.
The transaction, undoubtedly, will eliminate tax evasion, but not fraud in the affidavits. It appears that the relaxation of bureaucratic regulations in the sale of housing will not eliminate “the manifestations of illegality and corruption,” as Granma says. And the government waits.
Translated by Regina Anavy
August 4 2011