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Can I use a part of my house for commercial purpose?

You can use up to 220 sq ft in a residential apartment for commercial use. While back office work is usually permitted by the society, activities which require the use of property as godowns, warehouses, cold storage, and laboratories are not permitted”, says Amit Desai, Owner, PropInvest Realty.

99acres.com - Using a residential property for commercial purposes - - 99acres.com

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For professionals, having an office space is an excellent way to boost business. However, you can only use your residential property for commercial purposes if your society management and zoning rules permit you to do so. Here, it is pertinent to note that some States have more lenient laws and allow up to 30 percent of the residential property to be used for commercial purposes by professionals, including doctors and lawyers.

Is there any law regulating the use of residential property in India?

The Zoning Law in India, made by the local municipal government or authorities, deals with the usage of the property across cities. Regulations under the zoning law spell out the use of land in a given area. The law aims to separate residential areas from commercial to protect the residents from the negative impact of commercial activities, and at the same time, facilitate the development of commercial areas.

What does the law say?

As per the law, services by resident advocates, lawyers, doctors, and accountants are some of the approved commercial activities in any residential area. In case your State allows you to use a portion of your property for commercial use, there are certain permissions that you need to obtain, including the consent of the society and local municipal office, depending upon the nature of business. Here, remember that running an office from home is widely accepted in different parts of the country. However, an activity involving the movement of goods from the residential premises is regarded as commercial and is usually not allowed unless specific permissions are obtained. Once a property is marked as commercial, it would be treated as a commercial property for all purposes, including taxation. However, the following activities, as per the directions of the Supreme Court, are not permitted inside residential premises:

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Any activity that involves the use of hazardous or combustible substances

Repair shops for automobiles

Retail shops dealing with the sale of construction materials, liquor, and junk food “In Mumbai, if you wish to use a residential property for commercial purposes, you need to obtain a No-Objection Certificate (NOC) from the respective society. You can use up to 220 sq ft in a residential apartment for commercial use. While back office work is usually permitted by the society, activities which require the use of property as godowns, warehouses, cold storage, and laboratories are not permitted”, says Amit Desai, Owner, PropInvest Realty.

Important points to remember

Before converting a section of your house into an office, you need to keep the following things in mind.

Get a shop/establishment license from the concerned municipal authority

Before you apply, be clear about the area that you require and the business that you intend to carry out Converting a residential property into a commercial one could imply paying more property tax. The civic body would levy commercial charges on the property and water and electricity supply, depending upon the area, size, and nature of the business activity. Some businesses do not require a permission certificate from the government authority. Usually, teaching, yoga, painting, dance, and tuition class are exempted from paying commercial charges. This means you can carry these businesses without converting the property. Defying the regulations prescribed by the government and conducting commercial activities in residential areas without converting the land might lead to severe legal complications, which differ across States. For instance, in Noida, the penalty for operating commercial activities from residential premises is one percent of the property’s total cost, which is a hefty amount. Therefore, always seek legal advice and follow proper steps before taking any decision.

99acres.com - Using a residential property for commercial purposes - - 99acres.com