Zakah on real estate and equipment prepared for lease
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Fatwa No. ( 17718 )
Q: We ask your Eminence about Islamic Mudarabah for leasing finance, affiliated with the Islamic Company for Gulf Investment. I have an account with them, and as shown in the attached brochure, they purchase medical equipment, cars, and real estate with the depositors' funds. The company then leases these items to citizens and pays us profits from the rental income it collects from leasing these items. In other words, our money is invested in these items that are leased to citizens. The question is: Is zakah due on our capital, or is zakah due on the profits we receive from leasing these items?
A: As for real estate, equipment, and the like that is prepared for lease, zakah becomes obligatory on the rental income when the lunar year (hawl) is completed from the date of the contract, provided that the rental income reaches the nisab. The amount due is one-quarter of a tenth, which is two and a half percent (2.5%). As for any rental income consumed before the completion of the lunar year, no zakah is due on it, and no zakah is due on the principal assets prepared for leasing. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q: We ask your Eminence about Islamic Mudarabah for leasing finance, affiliated with the Islamic Company for Gulf Investment. I have an account with them, and as shown in the attached brochure, they purchase medical equipment, cars, and real estate with the depositors' funds. The company then leases these items to citizens and pays us profits from the rental income it collects from leasing these items. In other words, our money is invested in these items that are leased to citizens. The question is: Is zakah due on our capital, or is zakah due on the profits we receive from leasing these items?
A: As for real estate, equipment, and the like that is prepared for lease, zakah becomes obligatory on the rental income when the lunar year (hawl) is completed from the date of the contract, provided that the rental income reaches the nisab. The amount due is one-quarter of a tenth, which is two and a half percent (2.5%). As for any rental income consumed before the completion of the lunar year, no zakah is due on it, and no zakah is due on the principal assets prepared for leasing. 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.