Commercial use of real estate in France

Change of use

The concept of use of a building or a housing unit refers to its legal status and the use that is made of it. It is defined by the Building and Housing Code and framed by local authorities to maintain a balance between the number of housing units and other building uses.

Authorization for a change of use is mandatory when converting a residential space into another use, such as a commercial space, for all categories of housing units and their annexes, including housing units included in a commercial lease or furnished spaces in communes with over 200,000 inhabitants and certain departments, except in urban free zones.

When seeking authorization for a change of use, it is necessary to apply to the town hall of the municipality where the housing unit is located. Generally, an application form is available on the municipality’s website and must be accompanied by supporting documents.

The authorization granted is provisional and personal, valid for the duration of the applicant’s occupation. At the end of the occupation, the space automatically reverts back to a residential unit.

Change of destination

The destination of a space or building concerns its physical and technical use, different from the change of use, which falls under the Building and Housing Code. Destination and change of destination fall under urban planning authorization, and thus, the Urban Planning Code.

Changing the destination involves modifying the type of construction, such as transforming a residence into a garage. Depending on the existence of construction work, a preliminary declaration or a building permit must be requested.

A preliminary declaration is required for changes without work or with light interior renovation work. A building permit is required when the work creates over 20 m² of floor space (or 40 m² for a project in a U zone of a Local Urbanism Plan) or modifies load-bearing structures or the building facade.

When seeking authorization for a change of destination, it is necessary to apply to the town hall of the municipality where the building is located. Unlike a change of use, which is provisional and personal, a change of destination is permanent according to urban planning regulations. It is important to note that the request for a building permit or preliminary declaration can serve as a request for authorization required for a change of use.

The need to inform the tax administration

It is mandatory to declare the “changement d’affectation” of a property to the tax authorities within 90 calendar days. This deadline includes all days of the calendar year, including holidays and rest days. This declaration allows for the updating of the cadastral rental value of the space, which serves as the basis for calculating property tax.

The commercial use of real estate in France is subject to precise regulations that can have significant economic implications for the parties involved. Property owners can benefit from an additional source of income. To comply with applicable rules and stay informed of legislative developments in this area, it is advisable to seek the advice of a specialized lawyer.