Zakah on Real Estate Prepared for Rental

Question : The questioner says: I have a building worth five million riyals, and its rent is approximately five hundred thousand riyals. Do I pay zakah on the rent only, or on its value and the rent, or according to an estimate of its value?

Answer : In answering this question, it should be known that any real estate prepared for rental and exploitation has no zakah due on its value, no matter how much that real estate amounts to, even if he has properties worth many millions; he owes no zakah on these properties, based on the saying of the Prophet
These properties that he prepared for his own exploitation are of the same kind as what the Prophet (peace and blessings be upon him) negated zakah for.
Accordingly, there is no zakah on any real estate, no matter how high its value, if it is prepared for rental. Rather, zakah becomes obligatory on its rent once a lunar year has passed from the time of the contract. If a lunar year has passed from the time of the contract and it is in the person's possession, he must pay zakah on it because it is dirhams, and zakah is obligatory on dirhams if they reach the nisab and a lunar year has passed over them.