Cuba Legalizes Buying and Selling of Cars

Cuba legalized the sale and purchase of automobiles for all citizens on Wednesday, another major step in the communist run island's economic transformation and one that the public has been clamoring for during decades.

The government announced the move in April, but sales have been on hold until the measure was published into law in the Official Gazette.

Under the law, which takes effect Oct. 1, buyers and sellers must each pay a 4 percent tax, and buyers must make a sworn declaration that the money used for the purchase was obtained legally.

Unrestricted sales had previously been limited to cars built before the 1959 revolution, one of the reasons Cuba's streets are about the only place on the planet one routinely finds a multitude of finned American classics from the 1950s such as Chevrolets Bel Airs and Chrysler Imperials, all in various states of disrepair.

Doctors, athletes, artists and others sent abroad on official business were allowed to bring cars back or purchase a boxy, Russian-made Lada or Moscovich from the state. Some senior workers were given company cars, though gas usage is strictly monitored to make sure they are only driven for work reasons.

The new law will allow the sale of cars from all models and years, and it legalizes ownership of more than one car, although tax rates go up slightly.

"It is a very positive step," said Rolando Perez, a Havana resident who was standing in line to get a license to go into business for himself. "They should have done it a long time ago."

The 40-page Gazette also says that Cubans who leave the island for good can transfer ownership of their car to a relative or sell it outright. Previously, the state could seize the automobiles of those who emigrated.

While most car sales have been illegal without government permission since the early 1960s, used automobiles have been widely traded in a booming black market for years. Buyers would hand over large amounts of cash under what amounted to handshake agreements, with title not changing hands.

Many cars are generations removed from the original title holder, meaning ownership will have to be untangled once the new regulations take effect.

While Cubans have long complained about restrictions on car sales, it is not clear how many will be in a position to take advantage of the new law. Most islanders make just $20 a month, although remittances from relatives overseas are playing an increasingly important role in household economies. A small number of successful new business owners may also be able to parlay their profits into a new set of wheels.

Cuban President Raul Castro has instituted a series of free-market reforms designed to rescue the island from economic ruin. Cuba has legalized some private enterprise, and allowed citizens to rent out rooms and hire employees.

The government has also announced it plans to legalize the sale and purchase of real estate by the end of 2011.

Based on reporting by the Associated Press.

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