A Further Look at the Recent Reforms Permitting Sale of Private Residences

Now that the dust has settled in Cuba after Raul Castro’s “liberalization” of private real property transactions, it’s worthwhile to look at how the new policy works.

The average salary in Cuba is $17 per month, and there are no financial institutions that grant mortgages. There are now approximately 500 properties for sale in Havana according to the Miami Herald. The prices range from $14,000 to $280000. If an owner wants to sell, both the buyer and the seller must pay 4 percent of value of the transaction to the government. Value is defined as the higher of declared value by the parties, or the value established by a government architect, whichever is higher. Of course, the profit would be also subject to income tax.

So where is the money going to come from to buy the homes? Only one place--relatives living abroad who are willing to send their family members dollars. The explanation for this is obvious. As Deep Throat advised Woodward and Bernstein: follow the money. Cuba is desperate for foreign currency to pay its international obligations that are presently in default. Any sale that takes place will result in a substantial share going to the government, in addition to the normal income tax that it already would be set to receive.

For the average Cuban family, it is unlikely that the new liberalization will produce any noticeable improvement. That it will now be legal to buy and sell both a home in a town and also in the countryside will have an equivalent impact of permitting the acquisition or sale of property on the moon.

in The Death of the White Rose, the revolution’s promise of democracy and its delivery of something else is exposed. The lie devastated the middle class that supported Castro  and the M-267 revolutionary forces and tore apart families and lives in the process. A revolution which imposes the will of a leader on its people, rather than the will of the people on its leader, only serves to change the identity of the leader and fails to improve the lot of the led. William Butler Yeats said it succinctly when he wrote:

Hurrah for revolution and more cannon-shot!
A beggar upon horseback lashes a beggar on foot,
Hurrah for revolution and cannon come again!
The beggars have changed places but the lash goes on.