Real Estate Prepared for Sale or Intended for Sale by Its Owner
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Fatwa No. ( 19525 )
Q: A man owns real estate consisting of villas and buildings, which he built on land he purchased. He is currently renting them out and pays zakah on the rents they generate whenever a lunar year passes over them. When a suitable price comes for any of them, his intention is to sell. I seek clarification from your Eminence: Does zakah apply only to the rents, or is it necessary to appraise the value of each property when a lunar year passes over it and pay zakah on that value in addition to the zakah on its rent? What if zakah was due on the actual properties for the years that have passed, but the properties themselves were not zakaed? Also, is there zakah on the villa a person lives in every time a lunar year passes over it and it is appraised at a price, especially since he intends that if a suitable price came for it, he would sell it and live elsewhere? Also, a man has a mentally ill brother for whom he is the guardian, and he has trust funds with him which he is growing. Finally, he found it best to buy a villa that generates rent, and he pays zakah on the rent. Is there zakah on the villa itself when a lunar year passes over it after appraising its price, especially since he intends to sell that villa if a suitable price higher than what he paid for it comes, to put it into something better, and so on? This is what I wanted to ask about.
A lunar year passes over it after appraising its price, especially since he intends to sell that villa if a suitable price higher than what he paid for it comes, to put it into something better, and so on? This is what I wanted to ask about.
A: If real estate is prepared for sale, or if its owner intends to sell it when a suitable price comes, it is considered merchandise for trade. It is appraised at the end of each lunar year, and its zakah is one-quarter of one-tenth of its current value. As for the rent received from it, he pays zakah on it when a lunar year has passed from the time the lease contract was made. Likewise, the price of the real estate if he sells it, he pays zakah on it when a lunar year has passed over it, paying one-quarter of one-tenth of it, whether the real estate belongs to him or he is its trustee. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q: A man owns real estate consisting of villas and buildings, which he built on land he purchased. He is currently renting them out and pays zakah on the rents they generate whenever a lunar year passes over them. When a suitable price comes for any of them, his intention is to sell. I seek clarification from your Eminence: Does zakah apply only to the rents, or is it necessary to appraise the value of each property when a lunar year passes over it and pay zakah on that value in addition to the zakah on its rent? What if zakah was due on the actual properties for the years that have passed, but the properties themselves were not zakaed? Also, is there zakah on the villa a person lives in every time a lunar year passes over it and it is appraised at a price, especially since he intends that if a suitable price came for it, he would sell it and live elsewhere? Also, a man has a mentally ill brother for whom he is the guardian, and he has trust funds with him which he is growing. Finally, he found it best to buy a villa that generates rent, and he pays zakah on the rent. Is there zakah on the villa itself when a lunar year passes over it after appraising its price, especially since he intends to sell that villa if a suitable price higher than what he paid for it comes, to put it into something better, and so on? This is what I wanted to ask about.
A lunar year passes over it after appraising its price, especially since he intends to sell that villa if a suitable price higher than what he paid for it comes, to put it into something better, and so on? This is what I wanted to ask about.
A: If real estate is prepared for sale, or if its owner intends to sell it when a suitable price comes, it is considered merchandise for trade. It is appraised at the end of each lunar year, and its zakah is one-quarter of one-tenth of its current value. As for the rent received from it, he pays zakah on it when a lunar year has passed from the time the lease contract was made. Likewise, the price of the real estate if he sells it, he pays zakah on it when a lunar year has passed over it, paying one-quarter of one-tenth of it, whether the real estate belongs to him or he is its trustee. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.