I own a house where I am presently staying. I have also purchased around a year back a bigger house where I finally intend to stay.
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:
I own a house where I am presently staying. I have also purchased around a year back a bigger house where I finally intend to stay. there is renovation work on and Inshallah it should be completed in about a fortnight. I have purchased the second house for staying over there and not for resale and since there were some leakage problem I could not shift. Can you please let me know if i have to pay Zakat on the second house and if yes how do we calculate the zakat amount. My intentions are to shift to the new house and give the old on rental basis.
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Zakah on house
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For the purpose of determining zakah, the Net Excess Assets would be the current market value of all of ones assets (properties, jewelry, cash, etc.) except:
- the value of the house one owns and actually lives in
- the value of the car/vehicle one uses on a regular basis
- the value of the furniture and fixtures one uses on a regular basis.
Lets say the current market value of the house you live in currently is $10,000.00, and the new house you have bought with the intention of living in it is worth $20,000.00.
Thus for this year, you will be exempt from paying zakah on the house you currently live, but will have to pay the zakah on the current market value of the new house at the rate of 2.50%.
When you move into the new house, at the end of the calendar year, absolutely irrespective of the annual rent it generates or does not generate, you will be liable to pay zakah on the market value of your old house at the rate of 2.50%.
Basically, one is exempt from paying any zakah on the value of the house one actually lives infor all other property or assets or savings which have been in ones possession for a period of one full calendar year, one will be liable to pay zakah on its market value.
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