VALUATION OF…
Bare Dominium
Ownership of property subject to a usufruct or other limited real right in favour of a third party, valued at a discount to full ownership.
Content status: Methodology and evidence log — Sources, Caselaw and Market Information are added incrementally.
Methodology
Bare dominium (ownership subject to a usufruct or similar right in favour of another party) is valued by first establishing the full ownership (fee simple) value using the approach appropriate to the underlying property type, and then discounting that value to reflect the bare owner’s inability to occupy, let or realise full benefit from the property for the duration of the usufruct.
The Big Five framework is applied at the level of the underlying property to establish full value; the bare dominium discount itself is not an income analysis but an actuarial one, typically based on the usufructuary’s age and life expectancy (for a lifelong usufruct) or the remaining term (for a fixed-period usufruct), using standard mortality tables or a present-value calculation of the deferred right to full enjoyment.
Because bare dominium interests rarely transact independently, a Direct Comparison cross-check is generally unavailable; the actuarially-derived discount should instead be tested for reasonableness against published life-expectancy tables and any available legal or accounting precedent for similar limited real rights.
Caselaw
Case law, regulatory rulings and expert-determination disputes relevant to valuing this asset class. Each entry cites its source and summarises the practice implication for valuers — this is not investment, financial, or legal advice.
The Evidence Log is for VDH Members
The Evidence Log for Bare Dominium — sourced sales, disposals and rentals with Valuer’s Lens commentary — is included in VDH Membership: from R125/month for SACPVP candidates and students, R399/month standard. All prices include VAT.
The methodology and case law on this page remain free to read.