Selling one's property to an institution, which then resells it to him on credit
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Q: We own a company that operates in the field of real estate and financing. Some clients approach us expressing their desire to finance the specific property they own. After completing all the administrative procedures and verifying the client's ownership documents for this property, we purchase it from the client for a cash price, which is paid to him upon the transfer of ownership to us. We then resell it to him on credit over a period of three years, with a profit ranging between five and twelve percent, on the condition that the property is returned to him after he has paid off the entire debt. What is the ruling on this, and is the contract valid? Is the additional profit taken from the client permissible or not? I hope you will present this question to the Permanent Committee for Scholarly Research and Ifta and issue a fatwa on it, so that this fatwa can serve as our methodology in the company, as some of them have informed us that it is valid.
A: This issue is known among the scholars as the reverse of the 'inah issue. It is forbidden according to the stronger of the scholars' opinions, because it is used as a means to riba, just like the 'inah issue.
A: This issue is known among the scholars as the reverse of the 'inah issue. It is forbidden according to the stronger of the scholars' opinions, because it is used as a means to riba, just like the 'inah issue.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.