The pandemic has hit businesses hard, particularly those with premises. As a result, Spanish towns and cities now have many premises that have closed, perhaps definitively. One way of making the most of these empty offices or shops is to convert them into a residential property. Read our four essential checks on how to change business premises into a home.
Thousands of Empty Premises
It’s estimated that more than 85,000 premises closed their doors in Spain in 2020 as a result of the pandemic. The trend is continuing this year as restrictions on movement curtail business activity. In Madrid and Barcelona alone, some 25,000 premises have emptied since January.
Given the shortage of housing, it makes sense to change business premises into a home rather than leaving them empty. This is a relatively simple process that works out considerably cheaper than buying a house. However, it does involve certain legal steps and requires the help of experts.
Check the Legal Requirements
Under Spanish law, premises are strictly defined and not as housing. This means that there are certain legal steps you need to take in order to change business premises into a home.
Suitable for habitation?
The premises must be fit for habitation so your first step is to request a habitability certificate (cédula de habitabilidad in Spanish) from the local council. Exact requirements vary depending on individual councils, but as a general rule the following applies:
Minimum size – studio apartments must have at 25 square metres of habitable space and apartments at least 38 square metres.
Minimum rooms – all converted premises must have room for a separate bathroom and those that become apartments must have space for at least a kitchen and one bedroom.
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Comply with community of owners?
You also need to find out if the community of owners permits the change of business premises into a home. Check the statutes before you apply for a habitability certificate.
Check the Costs
In general terms, buying business premises with the view to changing them into a home is considerably cheaper than purchasing a property. It can be up to 50% less expensive. However, you do need to factor certain costs into your budget to work out whether it really is cheaper.
Change of use
Habitability certificates are not cheap – expect to pay at least €3,000 for a certificate allowing you to change the use of the premises.
You will also need a building licence to carry out the refurbishment. The cost of a permit varies depending on the council, although it is usually a percentage of the cost of the work.
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Check the Finance
If you need a mortgage to buy the premises to change into a home, do your research beforehand. Loans for purchasing business premises tend to be more restrictive than those for a home.
For example, the maximum loan to purchase premises tends to be 60% of the value rather than the 80% that is the norm for residential property. The length of the loan is generally less than 20 years compared to up to 30 for a home mortgage.
Check with the Experts
Before you change business premises into a home, take expert advice from professionals such as an architect, interior designer and builder. This will allow you to create the most suitable property to live in and avoid problems later on.
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