Can a commercial space be transformed into a dwelling?
Summary
- How to transform a commercial premises into a dwelling?
- What are the steps to be taken with the cadastre?
- What are the steps to be taken if the premises are in co-ownership?
- Does converting commercial premises into a dwelling have tax consequences?
- Does the dwelling have to meet habitability standards?
- Can a home be converted into commercial premises?
Home improvement shows would tell you that you can transform any real estate into any kind of property. And it's true when it comes to transforming a commercial space into a personal residence. What's necessary here is to change its type of rental investment, which can often be expensive in large cities like Paris.
- Residential
- Commercial
- Agricultural
- Industrial
- Special Purposes
Following this change, you'd do well to consult the Local Urban Plan (PLU) in Paris or your local town hall to ensure that they do not oppose the change.
The PLU is a regulatory document intended to organize a city's development and evolution over several years. It contains all the requirements concerning the prohibitions or limitations of certain real estate investments within a given geographical area.
When converting a commercial space into a residence is accompanied by work, it is necessary to:
- Apply for a building permit if the change is accompanied by work to modify the load-bearing structures or the façade of the building (i.e. adding windows or doors)
- Make a prior declaration (for other cases)
Moreover, if the room measures more than 150 m² of floor area, it is mandatory to use an architect for work affecting the load-bearing structure or the façade of the building.
Does converting commercial premises into a dwelling have tax consequences?
The transformation of any property into a personal residence modifies the calculation of the property tax. The territorial economic contribution is abolished and is replaced by the payment of the housing tax.
Upon completion of the transformation, the owner must declare the change of use within 90 days. The form can be sent as a recommendation with a receipt or deposited at the cadastre office.
This declaration makes it possible to update the cadastral rental value of the property from which the property tax is calculated.
Does the dwelling have to meet habitability standards?
- Must be equipped with a drainage system
- Must be connected to an electricity grid
- Must include proper electrical, heating, and gas installations.
- Must have natural lighting with a window
- Must have an air renewal system
If the property is converted into a rental, it must meet obligations related to the notion of “decent housing.” As such, it must include:
- Proper Security
- The Comfort of the tenant (i.e. absence of parasites, distribution of cold and hot drinking water, presence of a kitchen area, bathroom with a separate toilet, etc.)
Useful Links:
Can a home be converted into commercial premises?
It’s also important to remember:
- There is no need for a change of use authorization if you live on the property and you do not receive customers or goods there.
- The change of use permit is mandatory for properties located in a municipality of more than 200,000 inhabitants.
- The change of use of a built property must be declared to the tax authorities within 90 calendar days.
- The co-ownership regulations clearly define the property's type of real estate investment (i.e. residential, commercial, agricultural, etc.). As such, it is necessary for all co-owners to reach a unanimous decision for the transformation to happen.
What are the steps to be taken with the cadastre?
The transformation of a premises into a dwelling modifies the calculation of the property tax, and the territorial economic contribution is abolished.
It is necessary to declare the change of assignment via a form. The form can be sent as a recommendation with receipt or deposited at the cadastre office within 90 days of making the change of destination.
This declaration makes it possible to update the cadastral rental value of the premises from which the property tax is calculated.
What are the steps to be taken if the premises are in co-ownership?
- Verify that the building's co-ownership regulations
- Obtain the unanimous agreement (commonly through voting) of the co-owners to carry out the potential transformation work
- It is possible to convert a commercial space into a personal residence.
- It is also possible to convert a personal residence into a commercial space.
- There are 5 main types of real estate investments: Residential, Commercial, Agricultural, Industrial, and Special Purposes.
- Converting a property's type of real estate investment also includes changes in its tax regulations.
- If the property is under a co-ownership, a unanimous decision is needed before you can legally transform any property.
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Posted on 26/04/2023 by
Andy LECUYER
