Zakah on mortgage
Mu' meneen Brothers and Sisters,
As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)
One of our brothers/sisters has asked this question:
Dear Brother in Islam
I don't have your direct email address, please forgive me to send my question on this email address
My Question to you is: I own a house but have a Morgage, I have some savings but my morgage is more than my actual savings, Do I still have to pay Zakaat? also Do I have to pay zakaat on my Jewellery?
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In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is no one (no idol, no person, no grave, no prophet, no imam, no dai, nobody!) worthy of worship but Allah Alone, and we bear witness that Muhammad(saws) is His slave-servant and the seal of His Messengers.
Beloved sister in Islam, although you have not asked regarding the mortgage, it is our duty as your brothers in faith and your sincere well-wishers in Islam to inform you that if the mortgage on the house was done on a conventional interest-based basis, then such a transaction would not be permissible in the sight of Allah Subhanah.
Q-1: I own a house but have a Morgage, I have some savings but my morgage is more than my actual savings, Do I still have to pay Zakaat?
If the house you own is occupied by you as a dwelling, then there is absolutely no zakah liable on the house one lives in, or the furniture and fixtures therein.
But if the house you own is an extra house, or an investment, or rented to another party, then zakah would be liable on the paid share of the value of the house.
Assuming that you live in the house you own, there would be no zakah on the value of the house as long as you live in it. But if you have other savings, and have had that savings in your possession for a period of one year, then the zakah of 2.5% of that savings would be due.
If you pay in your savings towards the balance mortgage of the house, then there would be no zakah payable. But if your savings are separate and have been in your possession for a period of one year, and you are paying a regular mortgage when it is due, regardless of the mortgage amount outstanding, the zakah would be due on the savings.
Q-2: Do I have to pay zakaat on my Jewellery?
Sunan of Abu-Dawood Hadith 1558 Narrated by Abdullah ibn Amr ibn al-'As
A woman came to the Messenger of Allah (saws) and she was accompanied by her daughter who wore two heavy gold bangles in her hands. He (saws) said to her: Do you pay zakat on them? She said: No. He (saws) then said: Are you pleased that Allah may put two bangles of fire on your hands? Thereupon she took them off and placed them before the Prophet (saws) saying: They are for Allah and His Messenger (saws).
Jewelry would constitute towards ones excess wealth, and if the jewelry has been in ones possession for a period of one year, then the zakah would be due on the jewelry.
Whatever written of Truth and benefit is only due to Allahs Assistance and Guidance, and whatever of error is of me. Allah Alone Knows Best and He is the Only Source of Strength.
Your Brother in Islam,