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:
As I have not yet received your reply, I will appreciate if you can expedite the same. Some emails forwarded to me did not answer my specific question.
Please let me know, if I have to pay Zakat on my land purchased a few years back to either build a house on it or to sell it and buy a house from that money. The purpose in both cases is to rent it out as a source of income on my retirement/old age. I already have a house where I am staying now. Also, please let me know if I have to pay zakat for a shop purchased a few years back for the same purpose, which has not yet been rented out.
Will appreciate your early response.
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If the total net worth of any believer (man, woman, or child) is more than the prescribed ‘nisaab’ of 7.5 ‘tolas’ of gold (app. 85 grams or app. Value US$2,500.00), then the person is liable to pay the obligatory annual ‘zakah’ of 2.5% on their excess wealth which has been in their possession for a full calendar year.
If the total net worth of any believer is less than the prescribed ‘nisaab’, he/she is not liable to pay any ‘zakah’ until their net worth exceeds the prescribed ‘nisaab’.
For the purpose of determining ‘zakah’, the ‘Net Excess Assets’ would be the current market value of all of one’s assets (properties, investments, jewelry, cash, etc.) except:
- the value of the house/s one owns and actually lives in (no zakah)
- the value of the car/vehicle one uses on a regular basis (no zakah)
- the value of the furniture and fixtures one uses on a regular basis (no zakah)
Your Question: Please let me know, if I have to pay Zakat on my land purchased a few years back to either build a house on it or to sell it and buy a house from that money.
As the land purchased was for commercial benefit, ie. to sell it or derive rental income from it, it will form part of your excess assets and indeed you would be liable to pay zakah annually on the market value of this land.
If you bought the land a few years back and have not paid zakah on it yet, you will be liable to pay zakah for all the years that the land was in your possession.
Your Question: I already have a house where I am staying now.
There is no zakah due on the house one actually lives in.
Your Question: Also, please let me know if I have to pay zakat for a shop purchased a few years back for the same purpose, which has not yet been rented out.
Zakah in Islam is not due on income but on the total excess assets one possesses. Thus if you bought a shop with the intention to earn rental income, regardless of whether it is rented or not, you would be liable to pay zakah annually on the market value of the property.
If you purchased the property a few years back and have not paid zakah on the property yet, you would be liable to pay zakah for the number of years the shop was in your possession.
Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.
Your brother and well wisher in Islam,