The Cuban government has announced a significant increase in taxes related to private housing transactions, a move integrated into the newly implemented Resolution 313/2024 by the Ministry of Finance and Prices (MFP). This measure is part of a delayed economic package that was initially stalled earlier this year. Published in the Official Gazette No. 102, the regulation mandates that the reference values of properties—used to calculate these taxes—will be increased fivefold. The government claims this will address what it describes as "fiscal distortions" and enhance state budget revenues.
Official sources state that this tax hike aims to align with the current real estate market prices, where properties are reportedly sold for up to ten times the previous reference values, which have been unchanged since 2017. The decision is based on assessments by the National Office of Tax Administration (ONAT), which highlighted that the former values did not accurately reflect inflation or the island's current economic conditions, as reported by the state-run newspaper Granma.
This Resolution is set to take effect on November 15, impacting both the tax on the Transmission of Goods and Inheritances, which buyers pay, and the tax on Occasional Personal Income, applicable to sellers. The MFP argues that this update aims to bridge the gap between market prices and declared transaction values, thereby curbing underreporting and non-payment issues.
New Classifications and Tax Payment Requirements
The regulation introduces a new classification for properties into five zones based on their type, location, and construction characteristics. This classification favors the government, particularly for "properties located in high-tourism significance areas" such as the municipalities of Playa, Plaza de la Revolución, Old Havana, Trinidad, Cárdenas (Varadero), and Viñales. According to the Gazette, the reference value in these cases will be determined based on specific calculation bases, allowing a more accurate assessment of property values.
Additionally, the MFP specifies that tax payments must be completed when formalizing the property transfer with a notary, aiming to "reduce high delinquency rates." Another new provision grants municipal Administrative Councils the authority to reduce the minimum reference value of properties in suburban areas by up to 10%, based on their market value and structural conditions.
This decision is part of a broader set of economic measures, which have also included recent increases in tariffs and prices across the country. Although authorities claim that these adjustments are intended to "reinvigorate the economy," the regulation has sparked concern among Cubans. They already face high living costs amidst rampant inflation and a real estate market that has sharply declined due to emigration, resource shortages, and the pervasive hopelessness of residing on the island.