Real Estate Shareholding: Is Zakat Due on It?
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Q: There are some real estate institutions that work on offering real estate plans through real estate shareholding. Their method is: they select certain lands with large areas and estimate the value of developing these lands and the value of introducing some necessary services to them. Then, they open the door for shareholding to those who wish to enter this project by offering shares for sale. Generally, the value of the share is determined based on a specific area of the land multiplied by the land purchase price and the development cost per square meter. Afterwards, the institution executes the project until its completion, then announces the sale of the land by public auction. When the entire land is sold, the institution calculates the total sales of the land, deducts the administrative costs and the project development costs, and the remainder is distributed among the shareholders. Our question to you is: Is zakat obligatory on these shares? Knowing that the circumstances of the shareholders differ in categories: 1- One who entered the shareholding with the intention of buying land for residence. 2- One who entered the shareholding with the intention of buying land for investment. 3- One who entered the shareholding with the intention of investing his money.
4- One who entered the shareholding and does not know whether he will sell his shares or buy land.
A: 1- One who entered the real estate shareholding with the intention of buying land: If this land is to be divided, there is no zakat on his share of it that he intends for residence. If it is to be sold, then zakat is obligatory on it. The land in which he holds shares is appraised at the end of each lunar year, and its zakat is paid based on that. Its lunar year does not break until he buys it after the sale in the shareholding with the intention of residence. 2- One who entered the real estate shareholding with the intention of buying land to invest it in rental: If the land is to be divided, there is no zakat on his share that he intends for rental. If it is to be sold, then zakat is obligatory on it. The land in which he holds shares is appraised at the end of each lunar year, and he pays the zakat on his share of it based on that. Its lunar year does not break until he buys it after the sale in the shareholding with the intention of investment by renting it out. 3- One who entered the real estate shareholding with the intention of trade: It is obligatory for him to pay zakat absolutely. The land in which he holds shares is appraised at the end of each lunar year, and he pays the zakat on his share of it based on that. 4- One who entered the shareholding and does not know whether he will sell his shares or buy land: He pays zakat on his share after appraising the land in which he holds shares, as mentioned previously.
4- One who entered the shareholding and does not know whether he will sell his shares or buy land.
A: 1- One who entered the real estate shareholding with the intention of buying land: If this land is to be divided, there is no zakat on his share of it that he intends for residence. If it is to be sold, then zakat is obligatory on it. The land in which he holds shares is appraised at the end of each lunar year, and its zakat is paid based on that. Its lunar year does not break until he buys it after the sale in the shareholding with the intention of residence. 2- One who entered the real estate shareholding with the intention of buying land to invest it in rental: If the land is to be divided, there is no zakat on his share that he intends for rental. If it is to be sold, then zakat is obligatory on it. The land in which he holds shares is appraised at the end of each lunar year, and he pays the zakat on his share of it based on that. Its lunar year does not break until he buys it after the sale in the shareholding with the intention of investment by renting it out. 3- One who entered the real estate shareholding with the intention of trade: It is obligatory for him to pay zakat absolutely. The land in which he holds shares is appraised at the end of each lunar year, and he pays the zakat on his share of it based on that. 4- One who entered the shareholding and does not know whether he will sell his shares or buy land: He pays zakat on his share after appraising the land in which he holds shares, as mentioned previously.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.