New decree eases private auto sales restrictions

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Ending decades of heavy restrictions on private auto sales, the government issued regulations that allow Cubans to buy and sell cars without “prior authorization of any authority,” according to a decree published Wednesday.

Decree 292, appearing in the extraordinary Gaceta Oficial No. 31, is laying out regulations for Cubans and foreign residents, half a year after the Communist Party Congress decided to liberate automobile sales. The law, one of the most anticipated reforms among Cubans, becomes effective Oct. 1.

Before the changes, private citizens were restricted to buying only used vehicles made before 1959. Until 1990, state workers were allowed to purchase new Eastern Bloc-made cars, but since then only state institutions had been buyers of new automobiles. Even so, many Cubans use more recent used vehicles they bought from foreign residents; there is no provision in the decree for legalization of black-market bought vehicles.

In a move that seems to add a perk for state workers, the decree allows private citizens to buy new motor vehicles from state distributors, but only once every five years, and with authorization from the Ministry of Transport. Buyers must prove their funds are from work for state institutions. 

Under the new rules, sellers must provide notarized documents for the Vehicle Registry of the Interior Ministry that include the sales price and a statement that the funds used to buy a car “is of legal provenience.”¬†During vehicle registry, sellers will be charged property transmission and income tax.

The decree also regulates vehicle ownership of foreigners, an issue that will impact hundreds of foreign property owners in new golf course condo developments. Foreign temporary residents may buy up to two vehicles during their stay, either locally or imported. These vehicles may then be re-exported, passed on to children or spouses, or sold to other foreign residents or a state distributor, but not to private Cuban citizens, according to Decree 292. Foreigners who fail to sell their vehicles before their definitive departure will lose their property.

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