The Resolution was published this November 1 in the Official Gazette of the Republic of Cuba, and will begin to be applied as soon as November 15, 2024.
In recent years, the situation of the Cuban housing fund has changed a lot. Now the government is trying to regulate property transfer acts with new legal bodies. With this measure, which comes into effect in two weeks, the aim is to update the real estate context of the island.
Among other modifications, Resolution 313/2024, issued by the Ministry of Finance and Prices, introduces changes in the minimum reference values to calculate taxes on personal income and on the transfer of assets and inheritances in the sale and donation of homes between unrelated natural persons. .
Changes in tax calculation
The regulations establish a minimum value that must be considered for the settlement of taxes when transferring a property, and classifies the residential areas of the country into five zones with specific coefficients. These coefficients adjust the reference value depending on the type of area where the property is located, which ultimately affects the amount of tax to be paid. The zones and their coefficients are:
- Special economic development zones: Coefficient 7.0
- Areas of high significance for tourism (such as Old Havana, Varadero and Viñales): Coefficient 6.0
- Relevant urban areas in Havana (like Cerro and Centro Habana): Coefficient 5.0
- Provincial capitals and some municipalities of Havana (like Marianao and Guanabacoa): Coefficient 4.0
- Rest of the municipalities: Coefficient 1.5
Examples of reference values and taxes
The resolution includes tables with specific values for different types of homes, depending on their location, construction, number of bedrooms and whether they include a garage or garden. Below are some examples that illustrate how these values affect taxes in areas of high significance for tourism y relevant urban areas in Havana.
Examples for areas of high significance for tourism (coefficient 6.0)
| Housing type | Bedrooms | Garage | Patio/garden | Valor total (CUP) | Reference value (CUP) | Tax (CUP) |
|---|---|---|---|---|---|---|
| Masonry house, heavy roof | 1 | Yeah | Yeah | 122,500 | 735,000 | 29,400 |
| Masonry house, light roof | 2 | Yeah | No | 137,500 | 825,000 | 33,000 |
| Masonry apartment, heavy cover | 3 | No | No | 195,000 | 1,170,000 | 46,800 |
| House, any material | 4 or more | No | No | 152,500 | 915,000 | 36,600 |
Examples for relevant urban areas in Havana (coefficient 5.0)
| Housing type | Bedrooms | Garage | Patio/garden | Valor total (CUP) | Reference value (CUP) | Tax (CUP) |
|---|---|---|---|---|---|---|
| Masonry house, heavy roof | 1 | Yeah | Yeah | 122,500 | 612,500 | 24,500 |
| Masonry house, light roof | 2 | No | No | 77,500 | 387,500 | 15,500 |
| Masonry apartment, heavy cover | 3 | No | No | 195,000 | 975,000 | 39,000 |
| House, any material | 4 or more | Yeah | Yeah | 152,500 | 762,500 | 30,500 |
Impact for citizens
The resolution implies that from now on taxes on sales or donation transactions will be calculated based on these new reference values, regardless of the price agreed between the parties. For many Cubans, this may mean an increase in the tax to pay, especially in areas of high demand or tourist relevance. In rural or mountainous areas, a 15% reduction in the tax will be applied, while in suburban areas the Municipal Administration Councils can reduce the reference value up to 10% depending on the conditions of the property.
These changes seek to regulate the Cuban real estate market, affecting owners, buyers and grantees with a tax system based on the location and characteristics of each home.
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**Interview with Maria Gonzalez, a Real Estate Expert in Cuba**
**Interviewer:** Thank you for joining me today, Maria. With the upcoming implementation of Resolution 313/2024, how significant do you think these changes in housing transaction taxes will be for both buyers and sellers in Cuba?
**Maria Gonzalez:** Thank you for having me. The changes introduced by Resolution 313/2024 are quite significant. By adjusting the minimum reference values for taxes and classifying residential areas into different zones, the government aims to create a more equitable real estate landscape. For buyers, this means they need to be more informed about the specific tax implications depending on the area they are looking at, which can significantly affect their overall costs.
**Interviewer:** Can you elaborate on how the new zoning classifications might impact property values and taxes?
**Maria Gonzalez:** Absolutely. The zoning classifications create a tiered system where properties in more desirable locations—such as tourist hotspots or vibrant urban areas—will have a higher coefficient that increases the reference value for the tax calculation. For instance, a property in Old Havana will pay a higher tax due to its coefficient of 6.0 compared to one in a less attractive area, which may only have a coefficient of 1.5. This adjustment could also influence market dynamics, potentially driving up property values in sought-after zones while creating opportunities for more affordable housing elsewhere.
**Interviewer:** Some might say these increased taxes could discourage sales. Do you believe this is the case?
**Maria Gonzalez:** It’s a valid concern. The higher tax burden might deter some potential buyers, especially those with limited financial means. However, the intention behind these changes is to regulate and modernize the housing market, which may ultimately create a more stable and predictable environment for transactions. It could also encourage investments in less developed areas by making them more appealing with lower taxes.
**Interviewer:** What advice would you give to residents considering buying or selling a property after November 15?
**Maria Gonzalez:** I would advise all parties to thoroughly educate themselves about the specific tax implications based on the new zoning coefficients. Consulting with a knowledgeable real estate agent or a financial advisor who understands the new regulations will be invaluable. Additionally, sellers should consider how these changes might affect their property’s attractiveness to buyers and price accordingly.
**Interviewer:** Thank you, Maria. Your insights into the upcoming changes are incredibly valuable for anyone looking to navigate the Cuban real estate market.
**Maria Gonzalez:** Thank you for having me! It’s important for everyone to stay informed during this transition as it could shape the future of housing in Cuba.
