Right of residence and usufruct: what is an encumbered property worth? – simply explained

A right of residence or a usufruct entered in the land register reduces the value of a property, often considerably. In about four minutes, this video explains how the two rights differ, why the value falls and how the reduction in value is calculated under the German Property Valuation Ordinance.

What you will learn in the video

• Right of residence: living in the home oneself, also with family and carers; letting only if permitted (§§ 1092, 1093 BGB).
• Usufruct: all uses, i.e. living there or letting; the usufructuary usually bears the running costs (§§ 1030, 1041, 1047 BGB).
• Valuation: market value without the right less the present value of the disadvantage, for lifelong rights with a life annuity factor (§ 47 ImmoWertV).
• Worked example: 500,000 € without the right; 14,400 € rental value a year × present value factor 10 = 144,000 €; with the right of residence approx. 356,000 €.
• In practice: on the holder’s death the value rises again; a reserved usufruct can prevent the ten-year period for the compulsory share from running.

Legal basis and sources (as of 8 October 2026)

• § 1030 BGB – usufruct
• § 1093 BGB – right of residence
• § 1092 BGB – transfer of exercise
• § 1061 BGB – death of the usufructuary
• §§ 46, 47 ImmoWertV – rights and encumbrances
• § 2325 BGB – supplement to the compulsory share
• BGH, judgment of 27 April 1994 – IV ZR 132/93 – reserved usufruct and the ten-year period

This video is an information and promotional video of the real estate appraisal office STRECKEL for its own services. It provides general information, is not legal or tax advice and replaces neither advice from a specialist lawyer for inheritance law nor an appraisal of your property. Examples are simplified.