Can a U.S. Citizen Buy Property in Cuba?

Buying property in the Pearl of the Antilles (a nickname Cuba shares with Haiti — an island shared with the Dominican Republic) still has plenty of roadblocks but is no longer a complex process. Nor is buying Cuban property as unstable a proposition as it once was.

In 2014, the Cuban government unleashed a set of investment laws that gave foreign investors greater purchase power and ownership over private property in Cuba. Not that this made acquiring real estate unrestricted or easy. The new guidelines only simplified the complexity. 

There remain plenty of obstacles, but you no longer need state approval to negotiate as a buyer or seller of property. Property transactions will still require registration at the National Registrar Properties Office. You must do this within 30 days of agreeing to a sale or purchase agreement.

Presently, investors in Cuban real estate can engage through a joint venture agreement. That agreement requires a registered foreign company or a Cuban national. It requires that the foreign investor be a temporary or permanent resident.

But it doesn’t end there. Read on to see how a U.S. citizen can buy property in Cuba.

Why Invest in Cuba

A photo of an old Cuban flag hung from a building in Old Havana, Cuba. It shows a narrow street with old brick buildings

There are significant differences and benefits to acquiring property in Cuba. For one thing, you don’t have to pay property taxes. 

Another significant difference is that while you can get financing to buy American properties, in Cuba, you must pay all cash upfront.

In America, investors can own as many properties as they want, but in Cuba laws limit investors to one property in the city and one in the countryside. The government sets these restrictions to avoid speculative purchases and to prevent one owner from accumulating large property numbers.

The Cuban Real Estate Market

The Cuba property market is unlike any in the world. Real estate reps are hard to locate, and it can also be challenging to find the correct price for a property.

Foreigners married to legalized Cuban citizens can buy property. The spouse of a Cuban resident becomes a permanent resident, giving investors the right to legally purchase Cuban property. 

The market is also open to Cubans temporarily living abroad or on the island. 

Foreigners, including Cubans in the States or other nationalities, can purchase real estate in the name of family members, spouses, or friends.

Individuals who own shares in a foreign capital company registered with the Cuban Chamber of Commerce are also eligible. This venture is most likely the best way to engage in Cuban properties.

The Rules

Before a sale agreement, an authorized surveyor assesses the property value. The surveyor generates a value price that gets frozen for five years. In the Cuban market, the assessed value is often well under or well over the market rate. That leaves noticeable room for fast appreciation of capital.

The discrepancy encourages the early purchase of Cuban real estate. But, regardless of any obvious benefits, one should not forget that the Cuban government only recently relaxed regulations and rules associated with private property ownership. 

Cuba’s potential for corruption has always made investment a risk. To avoid the risk, professional counsel and assistance are critical if non-nationals hope to conduct a profitable and safe transaction.

Purchase Process

If you should find a seller and you both come to an agreement, the transaction needs registering with a Justice Ministry Lawyer, or notario. The government official prepares the sales contract and titles once it’s verified the transaction meets legal requirements.

The buyer must make a payment within 30 days. Before any final decision, the buyer has to deposit the decided amount into a Cuban bank to pay for the property. 

Risks of Buying Property in Cuba

An image of an old 1960s car in front of a run down building in Cuba. It represents the fact that many buildings in Cuba are in bad shape

The most significant risk of buying property in Cuba is overpricing. Unreasonable prices and inaccurate recording of property worth are common. 

You also have to be aware of legal ownership. There is a culture where residents will swap houses. This isn’t unusual due to a lack of a still unformed market. 

When it’s time, buyers have to use a bank cashier’s check to fully pay for the property. Both parties must manage taxes incurred within the time frame. The buyer then registers the new title at the municipal property registry.

Due Diligence

Despite the new reforms, buying Cuban property is still flush with legal roadblocks and ambiguities. To avoid falling into the abyss and potentially losing a lot of money, foreigners must conduct thoughtful due diligence before going through with a real estate purchase.

Not too long ago, the country had no real estate agents. Today, a real estate agent is a rarity in Cuba, but in 2013, real estate agents became an accepted practice in Cuba. 

Registering accurate property values isn’t a priority here. Sellers can lean toward the extreme when it comes to pricing. This is because, for many owners, the property is their single and most valuable asset. Ignorance of value and sentimentality drive their asking price.

Between hearing about property prices in places like America, proprietary opinion, and sentimental worth, and even third-party influences, owners believe their properties are worth a great deal more than they are. 

This thinking hurts a lot of deals. An American investor can put a lot of energy and funding into investigating, only to have the deal fall apart because of misguided pricing. Cuban property owners often stigmatize their property in this way. Remember, the Cuban real-estate-to-American-investor venue is relatively small. Potential buyers know of exorbitant prices and likely stay away.

Finding a reliable and legal partner in Cuban joint ventures is crucial. A seasoned, reputable real estate professional with the license to operate in Cuba enhances the possibility of successful foreign sales. 

If looking to invest here, it may be a good idea to also find an agency in the states that know the Cuban property market. This organization can act as an intermediary. Solid representation on your behalf will be the best way to purchase via international economic association agreements, through a joint venture with a Cuban national, or with a foreign capital Cuban company.

Experienced Cuban real estate property brokers can navigate the myriad of red tape and changes an investor would never be aware of. There are also benefits an investor might not find out about. For example, foreigners who purchase Cuban property can apply for a yearly, renewable residence visa.

Travel Complications for Investors

An illustration of a cuban flag with a visa form laying on top of it. The flag features a red section with a white flag, along with blue and white stripes

It might be difficult to even see a viable property. Travelers going from the U.S. to Cuba cannot enter Cuba as tourists unless they have family in the country. It’s an American law established by the U.S. government to minimize the U.S.’s stringent sanctions on Cuba. These laws require travelers to engage in cultural activities while in Cuba, not business. 

One requirement for getting into Cuba is having a Cuban Tourist Card. Tourists must also carry a self-certification. The document covers one of a dozen travel categories that allow entry into the country. Tourists are forbidden to spend money in restricted areas and with specific businesses. Visitors are also obligated to keep their travel records and receipts for at least five years.

A professional realtor on both sides of Cuba and America can bridge the obstacles and monopolize the influences driving modern Cuba to your advantage. 

Interacting with Cuba

Economic hardship and decades of embargo under Communist rule leave the transport infrastructure foundationally weak. Internet access is slowly growing in the mainstream. 

The worldwide web is still a relative enigma. In vast parts of the country, residents are unfamiliar with laptops, tablets, and cells. The younger generation in Cuba is leading the integration of the internet into the culture. Hotspots are becoming major hubs for a lot of communities. 

As these groups rapidly increase the country’s exposure to the outside world, they grow the potential for investors to have a greater chance of looking in.

Do I Need to be a Cuban Citizen to Own Property?

Not necessarily. By law, only Cuba’s permanent residents can buy, sell, or own property. But the country is loosening restrictions and offering reforms that give foreigners a fighting chance to become property owners. Investors do have to meet certain criteria. 

Government restrictions also prompt informal real estate transactions. In this case, many property “owners” are selling residences and structures that legally don’t belong to them.

Can the Cuban Government Seize Foreigners Property?

Yes, the government can and has seized foreigner-owned properties. The U.S. State Department is pushing the Cuban government to either return property and/or provide compensation. This does not include only residences and businesses, but cattle, horses, art, and more.

Do Property Values Appreciate in Cuba?

Despite its economic struggles, Cuba’s real estate market has always been a fairly stable enterprise. The country saw a boom as early as 2011. By 2018, the real estate market was a multimillion-dollar industry. With the country’s new guidelines, the real estate market is likely to continue expanding. 

Demand keeps prices afloat and growing. There are homes in Cuban, based on U.S. dollars, worth almost $2 million. Properties in the upscale Miramar can cost over $600,000.

3 Areas With High Appreciation in Cuba

A photo of the city of Havana including several famous buildings. A river is in the foreground of the image and the cityscape shows dozens of beautiful old buildings

Here are three regions of the country that show property appreciation is quite impressive.

Havana

If Cuba has a New York City, it’s Havana. The country’s capital, Havana is a cultural and political hub that attracts tourists and ex-pats. The architecture is inspiring colonial. Not far away is Playa del Este, a beach that stretches over 15 kilometers. Havana is home to some of the most sought-after properties in the country.

Santiago de Cuba

Santiago de Cuba has a reputation as being culturally Caribbean. A big attraction to the region is the annual carnival, a colorful celebration. Santiago de Cuba is a great source of pride for Cuba. It boasts Plaza de la Revolución, host to a range of ongoing meetings and parades. 

Trinidad de Cuba

Considered Cuba’s most popular hub, Trinidad de Cuba is on the border of the Caribbean Sea. It’s home to 500 years of history, including palaces and classically styled buildings from the conquistadores period. Real estate in the region is highly regarded, making appreciation inevitable as the country continues to open its doors.

Best Websites for Finding Property in Cuba

While the internet is still a rare commodity to Cubans, it’s not to Americans looking for property. Here are five leading websites for finding properties in Cuba.

Point2Cuba

Realigro

Cuba Property Sales

Gabinohome

Detras de la Fachada

Cost Associated With Buying Property In Cuba

The mantra for real estate remains location, location, location. It’s no different in the Pearl of the Antilles. Costs for property can range from a few thousand dollars American to well over a million.

Ironically, few Cubans can afford to buy these properties as yearly salaries are typically a few hundred American dollars. Considering that, it is more likely property transactions will involve foreign buyers.

Costs will include registration, title, inspection, agency fees, and other ancillary expenses.

Many buyers are Cuban Americans. They invest to give relatives homes or businesses. As stated, foreigners can purchase property through and for third parties. 

How Do I Get a Loan for a Property in Cuba?

Cuba does not offer property financing. Buyers complete property transactions with a cashier’s check from a Cuban bank. Americans can get financial assistance from lenders in the U.S. Buyers must see that the funds get to a Cuban bank and then turned over to sellers.

6 Steps to Buying Property in Cuba as an American

There is no concrete pattern for buying property in Cuba as an American. Reformed guidelines have opened up the possibilities, but there are many paths and obstacles to navigate. 

We do know that checking these basic six things is a good general plan for buying property in Cuba. 

  • Marital status
  • Citizenship
  • Real estate agents
  • Sales agreements
  • Funding and expenses
  • Location

Conclusion

Cuba’s attempt to open up its borders to foreign investors is still rife with uncertainties. But Cuba and the United States’ attempts to open diplomatic doors are gradually giving investors new opportunities. It’s an excellent time to explore Cuba’s real estate market.