In a New York Times article on August 2nd, I learned that the Cuban government plans to legalize the buying and selling of property at the end of the year. The implications and knock on effects of this could be tremendous. Property sales would encourage much-needed renovation, creating jobs. Banking would expand because, under newly announced rules, payments would come from buyers’ accounts. The government, which owns all property now, would also benefit greatly. It would collect taxes on the sales of homes and apartments where money in the current system passes under the table.
While the current plan seems to prohibit foreign ownership, there is still a role for Cuban emigrants, specifically those living the US. Cuban-Americans can take advantage of Obama administration rules letting them send as much money as they like to relatives on the island, fueling purchases and giving them a stake in Cuba’s economic success. Money transfer companies like Moneygram and Western Union are well-poised to capitalize on the influx of money to the island.
Many people remain skeptical of the government’s promise to release control, and only time will tell how it plays out.