Cuba Real Estate Laws
Regulations issued in 1996 legalize private land ownership making it possible to invest in real estate and own property. Consequently most foreigners invest in foreign real estate. Property rights are now recognized and protected from state expropriation. This opens the door for real estate investment and development. There is a potential windfall in redevelopment in Havana or where housing has become substandard. Dilapidated buildings abound, needing new plumbing, water, electrical work and structural redesign.
One area that promises to be a potential gold mine is the run down decaying buildings which border Havana’s sea side malecón. This area has the potential to become another tourist Mecca like Miami’s South Beach. It is only a matter of time until this type of transformation will take place. About 80% of Cubans own their own homes. Those who owned homes before the revolution and stayed have been allowed to keep their homes. Others have acquired homes since then. By law Cubans can trade homes but cannot sell them. The Urban Reform Law of 1960 changed rent payments into mortgage payments on a five to 20 year basis. This made owners out of renters. Today a large percentage of Cubans own their own homes and pay no property taxes. There is a tremendous housing shortage at present in Havana with some houses and apartments housing several families.
When looking to invest in land or housing don’t assume that the person who is selling land is honest. Proceed with caution. Hire a trustworthy attorney to explain the finer points of local laws. Have your attorney check out any documents and to help you at every stage of negotiations. Make sure he finds out who is the rightful owner of the property and if there are any liens and encumbrances. It is not unusual for scam artists to sell the same piece of property two or three times to different individuals. Also, be sure to talk to your future neighbors. Ask them about water shortages, safety, burglaries or other problems in the area. Inspect the property in person - never sight unseen. Check to see if you need special permits to build. Be sure to compare land values in your area to see if you are paying a fair price. Make sure that roads and streets are in decent shape and that telephone and electrical services are available if you are building in a remote area. If you can you are wise to rent in your favorite area first in order to find out if it is really for you.
Beach property is always a good investment if you can find it for sale in Cuba. Be sure to check out restrictions when buying property adjacent to the beach. Before you decide to move to an isolated beach area or resort, be aware that the novelty of living at the beach full time wears off quickly. Visiting the beach for a few days or weeks is very different than living there. The humidity, boredom, lack of emergency medical facilities in isolated areas, tourists and crowds are factors to consider.
The sale of real estate in Cuba is a r relatively new addition to the local economy and one that has materialized through the intense demand from visiting tourists. Recently it was announced for that, 1 the first time, foreign tourists will be able to buy condominiums and time-share units as a part of a $250 million Canadian-Cuban joint venture. The project, backed by the Cuban government, calls for construction of 2,000 luxury units over the next ten years and is one of the biggest outside investments yet in Cuba’s tourism industry. There will be many new projects with apartments ranging from a simple studio unit to luxurious penthouses, villas and condominiums. All will have swimming pools, garages, central air conditioning, power generators and all of the other amenities of home. Most of the projects currently underway are in the Havana area extending from the eastern beach region to the upscale Miramar area. There are currently no mortgage services available on the island although these services are bound to be available in the not too distant future as demand for new housing grows. At least in the short term, American citizens won’t be among those buying into the new resorts. But other foreigners have no such constraints. However, all of this is sure to change once Cuba and the US normalize relations, hopefully in the not too distant future.