Special assumption
A short, practical note on special assumption, with the public definition from IVS / Red Book (effective 31 January 2025).
In my practice, a special assumption is an assumed fact that differs from reality at the valuation date, or that a typical market participant would not make. Examples I use: valuing as if a proposed building were already complete, or as if an occupied property were vacant. It makes the value contingent on a change in circumstances, so it must be reasonable, supported by evidence and relevant to the purpose. Under the Red Book, it must be expressly agreed and confirmed in writing to the client before the report is issued — and I do not issue without that.
“Where assumed facts differ from those existing at the valuation date, it is referred to as a “special assumption”.”
Source: IVS 102 Bases of Value, para 60.01
“An assumption that either assumes facts that differ from the actual facts existing at the valuation date or that would not be made by a typical market participant in a transaction on the valuation date.”
Source: Red Book Global Standards, Part 2 Glossary («Special assumption»)
Common confusion
Special assumption ≠ assumption: an assumption accepts something as true without verifying it; a special one assumes something that is not true at the date.