Everything you should know about buying properties in Cuba

buying a house in cuba

November 2, 2011 marked a before and after for real estate business and movements in Cuba.

On that day, a decree law was published in Cuba’s Official Gazette (edition number 35 of 2011) allowing Cubans to buy, sell, donate, swap and award housing. Finally.

One of the objectives of the law is to solve the housing problem in the country, one of the most difficult and serious historical problems faced by Cuban citizens. 

At present, the housing deficit in Cuba exceeds 800,000 homes. 

Despite the fact that the housing construction plan is a priority for the Government, in recent years the country has only managed to build housing at a rate 20 times lower than the country’s needs. Almost 40% of Cuba’s housing stock is in a poor or fair state of construction according to official statistics.

Until 2011, the Cuban state could consider itself the owner of all housing on the island. Cubans could own their homes, but could not sell them freely.

However, the prohibitions – which lasted for decades – did not prevent the illegal buying and selling of houses in Cuba. 

These movements were frequent, but under a cloak of illegality and corruption. The sales were camouflaged as exchanges, donations or false marriage agreements.

Who can buy houses in Cuba?

In order to make the sale and purchase of houses legal in Cuba, it was necessary for the authorities to modify Law 65 on December 23, 1988.

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The Council of State of the Republic of Cuba modified Article 2 of this law authorizing Cubans residing in the national territory and foreigners with permanent residence in Cuba to buy and sell houses.

How much real estate can be owned in Cuba?

Cuban law authorizes the ownership of only two properties within the country, one as a permanent residence and the other as a summer residence (on the beach or in the countryside). No Cuban or foreigner can own more than two real estate properties in Cuba.

Exchanges

In order to be legal, exchanges between individuals must be formalized before the notary of the municipality where one of the houses involved in the exchange is located. 

It is a prerequisite for an exchange that the houses are registered in the Land Registry. Houses without property, of which there are many in Cuba, cannot be legally exchanged or sold.

In the negotiation of an exchange it is legal to compensate the owner with money. Cubans call this financial compensation the “vuelto” or “cambio”. 

The delivery of cash as compensation must be stated in the deeds of the house. The payment is made at the moment of the formalization of the exchange through checks issued by Cuban banks.

Donations of houses in Cuba

Amendments to the Cuban Housing Law, approved in 2011, allow the donation of houses to be formalized before a notary public of the municipality where the property to be donated is located. 

As in the case of exchanges, the house to be donated must also be registered in the Property Registry.

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Buying and selling a house in Cuba

The purchase and sale of a house between natural persons must be formalized directly before a notary in the place where the property is located. The price will be freely agreed upon by the parties, but must be based on the minimums established in the current regulations.

The Cuban Ministry of Finance and Prices has established a minimum reference value for the sale and purchase of homes in Cuba.

Requirements for the seller

In order to formalize the act of sale before a notary public, the seller of a property in Cuba must meet the following requirements

Not having debts for the payment of the transfer of ownership of the property, which is accredited by means of the corresponding document issued by a bank branch (management check that accredits the deposit of the money in cash deposited by the buyer in favor of the seller of the property).

The real estate object of the sale and purchase must be registered in the Property Registry or be accredited prior to the act of purchase.

Taxes on the sale and purchase of houses in Cuba

In any act of purchase and sale of houses in Cuba it is necessary that the seller pays the taxes on the personal income.

The buyer must pay the taxes on the transfer of goods and inheritance, which will be 4% of the value stated in the management check.

You can find more information about the minimum referential value for the act of purchase and sale of real estate in Cuba here

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