Cuban government quintupled taxes on the buying and selling of homes

The Cuban regime announced a drastic increase in taxes related to the buying and selling of homes between private individuals, a measure outlined in the recent Resolution 313/2024 from the Ministry of Finance and Prices (MFP) and part of the economic package that had been put on hold earlier this year.

The regulation, published in Official Gazette No. 102, establishes that the reference values of properties—used to calculate these taxes—will be increased fivefold with the aim of correcting what the government describes as "fiscal distortions" and improving revenue for the state budget.

According to official information, this increase aims to align with current real estate market prices, where, according to the government, homes are sold at prices that exceed the previous reference values by up to ten times, which have been in effect since 2017.

The measure follows studies by the National Office of Tax Administration (ONAT), which indicate that the previous values do not reflect inflation or the current economic conditions on the island, as detailed in the publication in the state-run newspaper Granma.

The Resolution will come into effect on November 15th and will impact both the Property and Inheritance Transfer Tax paid by buyers and the Occasional Personal Income Tax applicable to sellers.

The MFP argues that this update aims to bridge the gap between market prices and the values declared in transactions, thereby curbing price underreporting and payment non-compliance.

The regulations also include a new classification for housing in five different zones, based on their type, location, and construction characteristics, benefiting the government. This includes "housing located in the municipalities of Playa, Plaza de la Revolución, Old Havana, Trinidad, Cárdenas (Varadero), and Viñales, due to their High Significance for Tourism."

In these cases, "the reference value is determined based on the calculation bases," states the regulation published in the Gaceta.

This will allow the regime to make "a more accurate calculation of the reference values according to the type of property." Additionally, the MFP specifies that tax payments must be made when formalizing the transfer of ownership before a notary, a measure aimed at "reducing the high levels of delinquency recorded."

Another development is the authority granted to municipal Boards of Administration to reduce the minimum reference value of properties located in suburban areas by up to 10%, based on their market value and structural conditions.

This decision is part of a set of economic measures that have included recent increases in tariffs and prices in the country.

Although the authorities state that the adjustment aims to "revitalize the economy," the measure has raised concerns among Cubans, who are already grappling with high living costs amid rampant inflation and a real estate market that has seen values plummet due to emigration, resource shortages, and the despair of living on the island.