Do I have to pay Zakat after possession of the shop on the value of the shop
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One of our brothers/sisters has asked this question:
Assalamalaikum dear brother,
My question is I have booked a shop with the savings available and will get the possession of same Insha'Allah by next year March. I still need to pay 3 more installments which will be paid from the Salaries Insha'Allah. Please advice if I am liable to pay Zakah. Also please advice after possession of shop do I need to pay Zakah on the value of shop.
Jazak Allah Khair.
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Respected brother, you would indeed be liable to pay the annual zakah on the market value of the property to the extent of the installments you have paid. Lets assume that you purchased the shop for 100,000 payable in 100 equal installments of 1,000, the market value of the shop today is 200,000, and you have balance 3 installments left to pay.
In such a case your paid investment of 97 installments will mean that you will be liable for annual zakah of 2.50% on 97% of the market value of the property. Thus your zakah for this year will be 2.50% of 194,000 or 4,850.
If after possession you intend to rent or lease the shop to someone else, you will be liable to pay annual zakah on the market value of the property.
And if after possession you intend to do a business for yourself from the shop which you own, then you will be liable to pay zakah only on the 'goods for sale' or inventory of the shop and not the shop itself.
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