The fair rule that determined the price based on the buyer’s salary disappears
14ymedio, Reinaldo Escobar, 13 November 2024 — The abandonment of the so-called fundamental laws of the socialist system in the Cuban model is something that has not been officially proclaimed, although it was slyly suggested in 1994 when the Special Period in Times of Peace was proclaimed, when it was necessary to appeal to the rules of the market “to save the conquests of the Revolution.”
The latest evidence that the publicized aspirations to establish real socialism on this Island are irrational and unviable is becoming clear after the publication in the Official Gazette of Resolution 313 of 2024, which will come into force on November 15.
The regulation issued by the Ministry of Finance establishes new minimum reference values for the liquidation and payment of taxes on personal income and on the transfer of property and inheritance, associated with acts of purchase and sale and donation of homes between natural persons.
These new reference values are five times higher than those established by this Ministry in March 2017 when it issued Resolution 112, which has now been repealed.
One of the reasons given in the document for carrying out this update is that it is necessary “given the current economic and social conditions.”
It is paradoxical that a government that requires private traders to reduce the price of their goods because it considers them excessive, then forces individuals to increase the price of the houses they sell fivefold with the sole purpose of increasing taxes.
Our lack of infrastructure and knowledge was balanced by belonging to a bloc where the weakest was worth as much as the strongest.
Let us go back to the time when there was still the illusion, or at least we were given the illusion, that “through a fair exchange between developed and underdeveloped nations” it was possible to achieve a socialist utopia. Our lack of infrastructure and knowledge was balanced by belonging to a bloc where the weakest was worth as much as the strongest.
We are talking about 1985. In May of that year the price I paid for the three-bedroom apartment that I still occupy was 4,200 pesos. Thus I stopped being a usufructuary who paid rent to become the owner who bought his home from a welfare state.
My salary was then 350 pesos per month and the cost of my house was calculated according to Law 65, in force since July 1985, based on the fact that I paid a monthly rent equivalent to 10% of my salary, or 35 pesos, and this figure was multiplied by 120 months, which in 20 years resulted in 4,200. If my salary had been the average for that year (188 pesos), then the price of my house would have been 2,280 pesos.
Almost 40 years have passed and the numbers must have obviously changed, but what was not supposed to change was the method for calculating housing prices, which was supposedly based on helping workers to buy a house.
If we do a reverse calculation with these elements, seeing that the reference price of my house, according to the aforementioned Resolution 313, is today 1,080,000, we can calculate that (if the same method of 1985 were maintained to calculate the prices of the houses) I would have paid for 20 years a monthly payment of 9,000 pesos, which is supposed to be 10% of a salary of 90,000. But it happens that the average salary in Cuba today is 4,648 Cuban pesos, which is 5% of this salary chimera of 90,000.
What kind of Cuban citizen were those who drafted this Resolution thinking of?
So one wonders: What kind of Cuban citizen were those who drafted this Resolution thinking of? Is the only reason for imposing an unattainable minimum price on housing mandatory to increase the amount collected through taxes?
The point is that the mere existence of “current economic and social conditions,” which the Resolution invokes to justify the new mandatory reference prices as a minimum for any purchase and sale transaction, are the denial of a deceased, though unburied, model.
I have no idea where the abandoned “socialist” formula of multiplying 10% of the salary by 120 months without including the real cost of producing a house came from; in the same way it is difficult to understand the reason why the State multiplies by five the “reference value” of a house that it neither built nor maintained.
This tedious play has been on stage for too long without any sign of renewal.
Many of the houses sold today are the same ones that were purchased under the just rules of socialism, but the most paradoxical thing is that the new officially established prices do not even come close to the very high prices imposed by abusive reality.
The illusion of a just method has vanished, as it is impractical and costly, but in the political theatre the bosses continue to play the role of providers of benefits who deserve meekness in gratitude.
This tedious play has been on stage for too long without any sign of renewal. Every day the make-up is falling off, the scenery is cracking, the script is boring and the actors are not convincing. The applause has died down for a some time now and the booing has already begun.
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