Change of Use

Change of Use - A change of use refers to the reclassification of a property from one approved use to another-for example, from office space to residential, from commercial to restaurant, or from warehouse to event space. According to state building codes, a change of use generally requires approval, as building code and planning law requirements vary depending on the use.

Permit Requirements and Prerequisites

A change of use occurs when the new use is subject to different or more extensive public law requirements than the previous one. In Bavaria, it is subject to approval under Art. 55 BayBO, unless the new use does not impose higher requirements. Approval requires:

• Planning Law Admissibility: The new use must be permitted in the building zone-a conversion to residential use is not possible in a commercial zone
• Building Code Requirements: Fire safety, emergency exits, parking spaces, and sound insulation must be met for the new use
• Technical Suitability: The building must be suitable for the new use or be converted accordingly

Typical Conversions and Potential

• Office to residential space: Particularly in demand in downtown locations - requires adaptation of plumbing, soundproofing, and lighting
• Attic to residential space: Most common conversion for existing buildings - change of use plus renovation work
• Commercial/Retail to Restaurant: Requires enhanced fire safety, ventilation, and noise protection measures
• Agricultural Buildings to Residential Space: A popular conversion in rural areas - challenges regarding structural integrity, insulation, and permitting in rural areas

Grandfathering and Its Limits

An important aspect of any change of use is the issue of grandfathering: Buildings approved under an earlier, less stringent legal framework may continue to be used for their original purpose, even if they no longer comply with current regulations. If the use is changed, this protection no longer applies: The building must then meet the building code requirements currently in force, which may necessitate significant retrofitting measures. Particularly affected are fire safety requirements (sprinkler systems, fire compartments, escape routes) and sound insulation requirements, which in older existing buildings often do not meet current technical standards.

For owners, this means: Before any change of use, a careful cost estimate should be conducted that includes not only the actual renovation work but also all retrofitting costs for fire safety and soundproofing measures.

Typical Changes of Use - Overview of Permitting Requirements, Costs, and Potential

Change of Use	Permitting Required	Main Requirements	Typical Renovation Costs	Rental Potential
Office → Residential	Yes (Art. 55 BayBO)	Soundproofing, plumbing, lighting	€400-800/m²	+30-60% rent vs. vacant office
Attic → Residential	Yes + Renovation Planning	Structural Engineering, Insulation, Skylights, Stairs	€600-1,200/m²	High Rent Due to Quiet Location
Retail → Restaurant	Yes	Fire Safety, Ventilation, Soundproofing, Parking Spaces	€500-1,000/m²	Higher Rent Possible
Agricultural building → Residential space	Yes (outdoor area § 35 BauGB)	Structural engineering, insulation, utilities	€800-1,500/m²	Unique location, high demand
Residential space → Home office/practice	Often no permit required	Only if no higher requirements	Low	Change of use without rent increase
Commercial → Care facility	Yes	Accessibility (DIN 18040), fire safety, emergency exits	€1,000-2,000/m²	Stable long-term lease

Practical Tip for Property Owners in Nuremberg and Franconia

We recommend that property owners in the Nuremberg metropolitan region submit a preliminary building application to the Building Authority early on when planning a conversion. The conversion of office space into residential space is politically supported in Nuremberg and tends to be viewed favorably by the city administration-especially in the city center, along the Pegnitz River, and in neighborhoods with high housing demand such as Maxfeld or Gostenhof. Specifically, it is worth considering vacant former commercial units as a starting point: When converting 200 m² of office space into three residential units, significantly higher contribution margins can be achieved due to the difference in rent (residential vs. vacant office). Note that a change of use may void grandfathering protections and result in substantial conversion costs.

Frequently Asked Questions

Do I need a permit for every change of use?

Not necessarily-if the new use does not impose higher requirements than the previous one, it may not require a permit. Converting an office into a doctor’s office generally does not impose higher requirements. Converting a store into a restaurant, on the other hand, does (fire safety, noise, parking spaces). In case of doubt, it is advisable to submit a preliminary building inquiry to the Nuremberg Building Authority (Building Permit Department)-the preliminary inquiry is subject to a fee, but is significantly cheaper than a subsequent correction.

How much does a change of use cost?

Permit fees range from 200 to 2,000 euros, depending on the complexity of the review. The actual costs arise from the structural adaptation measures: fire safety upgrades (5,000-50,000 euros), plumbing installation (10,000-30,000 euros), soundproofing measures (5,000-20,000 euros), and the creation of parking spaces. For conversions of existing buildings, a detailed preliminary cost estimate should always be prepared by an architect before applying for approval.

Can the landlord refuse a change of use?

For rental properties, the tenant must obtain the landlord’s consent before changing the use. The landlord may refuse consent if the change violates the lease agreement or the landlord’s legitimate interests. Under building code regulations, the owner (not the tenant) is always responsible for obtaining approval and is liable for violations of building code regulations. An unauthorized change of use may result in fines and orders to remedy the violation.

What are the tax implications of a change-of-use measure?

The tax treatment of a change of use depends on whether the renovation costs are classified as maintenance expenses or as construction costs (subject to capitalization). If the renovation costs exceed 15% of the building’s acquisition cost within three years of acquisition, the rule on “acquisition-related production costs” (§ 6 (1) No. 1a EStG) applies-the costs must be spread over the depreciation period rather than being deducted immediately. In the case of a change-of-use project on an existing building held for more than three years, the renovation costs are generally immediately deductible as income-related expenses, provided the building is rented out. For larger conversion projects in the Nuremberg metropolitan region, we recommend consulting a tax advisor at an early stage to review the tax classification and, if necessary, obtain a binding ruling from the relevant tax office.

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