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A bare dominium is a limited real right in a property whose income has been stripped off. For example, A took a bond from B Bank to buy a building. There is a 20-year lease in the building. As security, A ceded the lease to B bank , where rental payments are paid by the tenant directly to B bank to cover the bond payments. In such a situation, A owns a bare dominium in the property because he is not entitled to the rental proceeds from the building. Note that A may sell the bare dominium to a third party as he likes, normally at a discounted price.

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Q: What is a Bare Dominium?
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Bare dominium may seem like a terrific idea. However, one ought to be cautious and allow for all possibilities, such as the fact that these arrangements are subject to the Capital Gains tax.


What is bare dominium?

A bare dominium is a limited real right in a property whose income has been stripped off. For example, A took a bond from B Bank to buy a building. There is a 20-year lease in the building. As security, A ceded the lease to B bank , where rental payments are paid by the tenant directly to B bank to cover the bond payments. In such a situation, A owns a bare dominium in the property because he is not entitled to the rental proceeds from the building. Note that A may sell the bare dominium to a third party as he likes, normally at a discounted price.


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