How is zakah paid on land purchased on installment for the purpose of trading?
Machine translationRead the Arabic original
The questioner:
A person says: I bought land for one million riyals on installment, paying five thousand riyals monthly, with the intention of trading it. The question is: how do I pay its zakah? I ask for clarification on this.
The Shaykh:
If he intends to sell it, if this land he bought was intended for sale and put up for sale, it is commercial, a commodity among commodities. If a year passes from the date of the sale contract and it is still offered for sale, he appraises it at its current value and pays zakah on that value he estimates, not on the price he bought it for, but on the value it equals when the lunar year is completed. He pays one-fifth of one-tenth, and so on for every year that passes while he is offering it for sale and intending to sell it, he appraises it at each year for what it is worth and pays zakah on it, whether its value increases, decreases, or equals the price he bought it for. This is the way to pay zakah. It is the same whether he bought it for a cash price and paid it, or for a deferred price and has not paid it; the entire matter is the same. This is commercial, this is a commodity like other commodities.
The presenter:
Allah has pointed this out to you.
The Shaykh:
Pay zakah on what you hold for sale. Yes.
A person says: I bought land for one million riyals on installment, paying five thousand riyals monthly, with the intention of trading it. The question is: how do I pay its zakah? I ask for clarification on this.
The Shaykh:
If he intends to sell it, if this land he bought was intended for sale and put up for sale, it is commercial, a commodity among commodities. If a year passes from the date of the sale contract and it is still offered for sale, he appraises it at its current value and pays zakah on that value he estimates, not on the price he bought it for, but on the value it equals when the lunar year is completed. He pays one-fifth of one-tenth, and so on for every year that passes while he is offering it for sale and intending to sell it, he appraises it at each year for what it is worth and pays zakah on it, whether its value increases, decreases, or equals the price he bought it for. This is the way to pay zakah. It is the same whether he bought it for a cash price and paid it, or for a deferred price and has not paid it; the entire matter is the same. This is commercial, this is a commodity like other commodities.
The presenter:
Allah has pointed this out to you.
The Shaykh:
Pay zakah on what you hold for sale. Yes.
Source
قناة «العلامة الدكتور صالح الفوزان»، كيف يزكى عن الأرض المشتراة بالتقسيط للمتاجرة فيها؟ لمعالي الشيخ صالح الفوزان — youtube.com
The Arabic text is a machine transcription of the audio recording.