What You Need to Know About Using Your Residence as a Business
Posted on: Thursday February 15, 2018
For many small businesses owners, turning a spare bedroom or vacant basement into a home office is a win-win situation. Not only are you saving resources by eliminating the need for a second property, you are also saving on transportation, commuting time, furniture and fixtures and even resources like internet and phone services. While there is no doubt that using your residence as a business can be convenient, it is important that homeowners and home buyers are fully educated about the legal (and tax) consequences of using their residence as a business.
If you are planning on converting your home into a commercial property, your first step is to check in with your municipality’s bylaws to see how the property is currently zoned. Keep in mind, there are many types of businesses that are exempt from needing an official commercial zoning permit. Once your property is marked as commercial, you would then be responsible for any applicable changes to property taxes.
Using your home as a business could affect your home’s resale value
If you are in your home for the long term you might not be concerned about how your home office set up might affect your home’s resale value. But if you are thinking about moving with the next few years, this is something you should consider. Running a business from your home could negatively impact resale if you have made custom changes to any part of your home to accommodate the business. Additionally, it could affect HST on the sale of the property. If you are selling a home that you have used as a home office, we recommend that you discuss your options with an experienced real estate lawyer at Nexera Law.
What to do if you learn the property you purchase is a commercial property?
Financing a residential versus commercial property can be very different, depending on the property. Because of this, many buyers enter purchase agreements with unrealistic expectations, which can lead to frustration. If you would like to purchase a commercial property, we recommend you discuss your options with an experienced real estate lawyer. At Nexera law, we are well versed in helping our clients navigate complicated real estate transactions, keeping you informed every step of the way.
*Please note that this article is not a substitute for legal advice and is provided for general information purposes only. Nexera does not warrant or guarantee the quality, accuracy or completeness of any information provided in this article. Click here to contact a Nexera representative to discuss your unique situation today.