With housing prices rising and many empty shop units on streets, the operation has become fashionable: the change of use from commercial premises to dwelling. It can be an excellent move — buying at a shop price and creating residential value — or a money pit if the essentials aren’t checked before buying. This is the guide in the correct order.
Step 0: urban planning feasibility (before paying anything)
The first filter is not the renovation: it’s the municipal planning rules. Each town hall regulates whether residential use is allowed on that parcel and floor, whether there is a density limit (maximum number of dwellings per building) and what conditions are required. This is checked with an urban planning enquiry or certificate at the relevant town hall. Buying the premises and saying “we’ll see later” is the mistake that ruins the whole operation.
Step 1: technical habitability requirements
The future dwelling must comply with habitability standards and the CTE: minimum surface area, sufficient clear height, natural ventilation and lighting (sufficient façade: deep units without openings usually fail here), minimum room sizes, accessibility and smoke outlets where applicable. An architect verifies this in a site visit before buying: it’s the best money you’ll spend in the process.
Step 2: the homeowners’ association
Check the bylaws: if they prohibit change of use or modification of common elements you need (new openings in the façade, chimneys), you will need the association’s agreements. Even if the bylaws are silent, any work affecting the façade or common elements requires their authorisation. Speaking with the community before buying avoids litigation later.
Step 3: project, permits and deed
With feasibility confirmed: a technical project for the change of use and renovation, municipal permits (building and change of use), execution, a responsible declaration or first-occupation licence for the new dwelling and, finally, the amendment to the deed and the Land Registry (the premises becomes a dwelling also in legal terms) and the Cadastre. Only then is it a dwelling for all purposes: mortgageable, rentable and sellable as such.
The numbers behind the play
Ingredients: price of the premises + complete renovation + project, permits and taxes, versus the final value as a dwelling on that particular street. The operation works when the local-to-residential differential in the area is wide and the premises has reasonable façade and proportions. That final value — the figure that underpins everything — is a market valuation we provide free of charge before you buy anything.
Have you got your eye on a premises? From our real estate advisory we help you verify feasibility with the right technicians and put together the full numbers for the operation. Paperwork and numbers first; the renovation last.
