Is there zakah on a house?

The questioner : Honorable Shaykh, a woman is with us on the line asking for your guidance. She says that she has a sum of money which she used to pay out every year, and she is an employee. She used it to build a house and took out a loan for it until the house was completed. Does she owe zakah on it?

The Shaykh : Do you mean on the house? There is no zakah on the house because it is a house for residence or a house for rent. The Prophet (peace and blessings be upon him) said: However, if a woman trades in houses, buying land and building houses on it and then selling them, and so on, just as merchants do with their goods, then she owes zakah on them, because in that case they become trade goods, and zakah is obligatory on trade goods, as is well known.