Using a house as an office

  • Thread starter Chord of Souls
  • Start date
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Chord of Souls

Guest
Greetings and salutations.

My little business is getting a bit bigger and we're looking out for a new office. Made a few tentative enquiries about the price of serviced offices near us (West Dublin). One quoted a ballpark of €40 per square foot inclusive of rates, heating, electricity..basically everything except your phone bill. That's €40,000 per annum for a 1,000 sq. foot office, which is around our requirement.

Then I got to thinking - you can buy a bigger residential house in the same area for €240,000. Granted deposit 10% would have to be paid, plus expenses and Stamp Duty. But a €216,000 mortgage over 25 years would be around €13,000 per year. You'd buy a lot of equipment and stuff for the difference.

Our business is purely office and computer work. So no anti-social activities. No need for signage - maybe a discreet brass plate. Not concerned about image issues. Only occasional client visits - maybe once a day if not less.

Are there reasons why I can't do this? Do I have to get any special permissions? Looking at the longer-term financial picture, it seems to be a no-brainer.

Thanks.
 

Brendan Burgess

Founder
Messages
40,246
Working from home is a good idea. It saves on commuting and allows more flexible hours. However, you would need to be very disciplined. Also, it might be more difficult to attract employees to work in your home as distinct from an office.

I am not sure what the planning issues are. The government encourages eworking. But 1000 square feet is a big office. That's pretty much the size of an average home and would be enough for about 10 office workers. If you have 10 people, it would probably constitute a change of use which would require planning permission.

You should also pay rates on the office part. The interest on the office part would be allowable in full as a business expense. But any gain would be subject to CGT.

Brendan
 
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Chord of Souls

Guest
Thanks for the reply, Brendan. I didn't phrase my question too well. The property would not be my home at all. I'd just consider buying it for use solely as an office.

From your reply, I take it that I'd require Planning Permission for change of use. Is this difficult to obtain? Can one buy a house, subject to granting of such permission, rather like buying a site subject to permissions? (I'd rather not be forced to buy a house that I subsequently can't use as an office.)

I'm guessing I'd pay Stamp Duty at the commercial rate (9%?) and I know about CGT. How much are rates?

Thanks again.
 

Brendan Burgess

Founder
Messages
40,246
Hi Chord

Now I see where you are coming from.

You would not get planning permission to convert a house into an office. It would be against all the principles of good planning. It would be losing a residential unit and it would set a precedent.

But the idea of owning your own office is a good one and you should pursue it. It might be a difficult to buy a 1000 sq ft office, but I don't know the area very well.

Yes, you will pay 9% stamp duty, but you can treat the entire interest as an expense.

One advantage of renting is that you can move more easily when your business expands. If your business is expanding predictably, you might be able to buy a 2000 sq ft office and sublet the unused part until you need it.

If you do decide to buy and you are looking at financing, post again and I will give you the benefit of my recent experiences in the area.

Brendan
 
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DEECIDE

Guest
Couple of months ago saw a programme about a business in England. They were a stock broker firm who moved from a city centre location to a village on the outskirts and bought and converted some old stone farm outbuildings . Even suited the employees who were living in the city as they were travelling away from busy traffic. Similar to you they only had occasional client visits but there was a novelty/feel good factor when they did call. Phone ,fax and broadband etc were available on site. Local planners were probably glad to see jobs coming into the area. Sort of mini decentralisation I suppose.
 
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daltonr

Guest
You would not get planning permission to convert a house into an office. It would be against all the principles of good planning. It would be losing a residential unit and it would set a precedent.
I don't see why. Let's put aside the question of whether principles are used in our planning at all. I don't see why converting a house into an office is any worse than building hundreds of thousands of square feed of office space in clumps beside motorways and making workers drive accross the city to get to them.

Surely good planning would involve mixing commercial and residential seamlessly so that during the day areas are busy with workers and at night those same people can socialise.

Instead we get the population waking up every morning, travelling often by car to the other side of the city, or to other counties, leaving the residential areas all but deserted during the day, then switching off the lights in their offices in the evening, driving back home leaving the commercial areas deserted until the next morning.

I didn't realise that there was a policy of not allowing houses to be converted into business properties. But if there is it's a policy I'd disagree with.

If my business grew substantially, I'd certainly like to be able to buy a house near where I live and convert it into a business premises.

Before we start worrying about people buying houses and turning them into offices we should worry about thousands of acres of houses and appartments being build with no playgrounds, schools, playing fields, pubs, office space etc.

I'm at a loss to see any evidence of coherant planning which promotes communities living and working in the same place with local access to essential services and facilities.

Instead we are spending billions on getting them accross the city faster. Wouldn't it be better to focus on reducing the need for commuting, rather than attempting to increase the speed at which we commute?

-Rd
 
J

jister

Guest
office / house

I made enquiries (in Limerick) about using a house under similar purposes to yours. They (the solicitor and estate agent) suggested that by purchasing a house on a street where there are a lot of properties already converted to commercial use then there wouldn't be a major issue. The corporation would be delighted because they could charge you nice rates too!

If you only had 4/5 employees then I would imagine that you could operate discretely from a house and pretend that they lived there. As long as the neighbours don't know any different and it does not affect them then I doubt they would be bothered.

In any case it might be difficult for the planners to do anything about it - unless it was causing a major nuisance.
 
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rainyday

Guest
Re: office / house

I can't see how you could possibly hide operating a business for 4-5 employees from the neighbours. In this country of twitching net curtains, it will be quite obvious that a business is operating.

RD - I don't see any difficulty with one person operating a one-man office type business from a residential area. But anything more than that will inevitably lead to additional traffic for visitors, deliveries, additional waste, more parking space required etc etc. I'm not saying that it is always a bad thing - I'm just saying it needs to be planned carefully.
 
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daltonr

Guest
Re: office / house

Rainyday,

I agree it would need to be carefully considered. But I was taking issue with the point that converting a house to an office is IN PRINCIPLE bad planning.

It's no worse than the planning we see everyday. In fact it makes a lot more sense than most of the planning I've seen.
If proposals to convert houses are being rejected out of hand on principle then that is wrong, wrong, wrong.

But anything more than that will inevitably lead to additional traffic for visitors, deliveries, additional waste, more parking space required etc etc.
That assumes that the business involves customers visiting, deliveries, etc. In this digital age that's less of an issue. Also I'd have assumed that an office would produce significantly less waste than a family residence. Apart from Paper Possibly which should be shredded or recycled anyway.

As for traffic and parking, well, if it's a residential area, it'll almost certainly be devoid of cars during working hours anyway.

I for one would be delighted to have businesses on either side of my house. Someone there at all times during the day, and no loud parties at night.

-Rd
 
M

Marie

Guest
business/domestic premises

Hi! My understanding was that the change-of-use legislation and planning laws were to do with health and safety issues in addition to effect on the homes nearby. Neighbours' homes are 'affected' if you have, for example, rooms stacked floor-to-ceiling with paper products. These constitute a fire-risk and if one occurs during the night the neighbours are cinders!........hence different levels of fire-resistant fittings/fixtured, fire-doors/walls would be needed......just as one example.

The other aspect is the health and safety of your employees. There are strict regulations about how much space per person must be provided in offices. There are regulations on number, size and type of lavatories and washing/rest-room facilities. There are regulations for access of services in emergencies. Everything, in fact, is "different" in the case of a building designed for commercial use - even if that use is warehousing, or I.T., or administrative.
 
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