Cuba declared Thursday it would legalize property transactions by individuals from Nov. 10, lifting the half-century ban on residents buying and selling houses since the early days of the 1959 revolution.
"The new law recognizes the sale, exchange and donation of houses among Cuban individuals and foreign residents who have permanent residence on the island," official daily Granma quoted an official as saying.
The Decree-Law 288 had been one of the most eagerly awaited reforms in Cuba among the series of changes under Raul Castro's administration to update the island's economic model.
However, the law comes with restrictions. It limits Cubans to owning only one home in the city as a permanent residence, and another in the country.
Real estate transfers have to be made before a notary and are subject to an 8 percent tax, the newspaper said.
Since Raul Castro took office in 2008, Cuba has implemented a series of changes to "eliminate prohibitions and adopt flexible procedures" so as to boost the economic and social development of the island.
Housing shortage is among the most severe social problems in Cuba. The situation worsened after the 2008 hurricane wave that destroyed 30 percent of the houses in the country.
In October, the Cuban government announced a similar decree that partially eased the restrictions to buying and selling vehicles among individuals in the country.