Zakah on land during construction
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Fatwa number ( 19924 )
Q: I have a plot of land on which I built a villa, with the intention of selling it. Please note that the construction period may last up to two years. How is the zakah calculated on it? Is it due during the construction, i.e., in the first year, or after completion, whether that is after two years or more?
A: No zakah is due on the villa you are building during the construction period, even if the construction lasts two years or more, unless you intend to sell it before completion due to a pressing need or similar circumstance that arises. In that case, zakah becomes due on it once a lunar year has passed from the time of your intention to sell, provided it has not been sold. It is then appraised at its current value at the end of the year, and its zakah is one-quarter of one-tenth of its value. The same applies if you continue building until it is completed and ready for habitation, and then you intend to sell it by putting it on the market. In this case, as in the previous one, it is considered merchandise for trade from the time of your intention to sell and its offer to buyers. It is appraised at the end of the lunar year, and its zakah is one-quarter of one-tenth of its value. For every subsequent lunar year that passes before it is sold, it is appraised at its current value at the end of each year, and one-quarter of one-tenth of that value is paid. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q: I have a plot of land on which I built a villa, with the intention of selling it. Please note that the construction period may last up to two years. How is the zakah calculated on it? Is it due during the construction, i.e., in the first year, or after completion, whether that is after two years or more?
A: No zakah is due on the villa you are building during the construction period, even if the construction lasts two years or more, unless you intend to sell it before completion due to a pressing need or similar circumstance that arises. In that case, zakah becomes due on it once a lunar year has passed from the time of your intention to sell, provided it has not been sold. It is then appraised at its current value at the end of the year, and its zakah is one-quarter of one-tenth of its value. The same applies if you continue building until it is completed and ready for habitation, and then you intend to sell it by putting it on the market. In this case, as in the previous one, it is considered merchandise for trade from the time of your intention to sell and its offer to buyers. It is appraised at the end of the lunar year, and its zakah is one-quarter of one-tenth of its value. For every subsequent lunar year that passes before it is sold, it is appraised at its current value at the end of each year, and one-quarter of one-tenth of that value is paid. 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.