Zakah on merchandise for trade
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Question: I have had a piece of land for several years and offered it for sale. I then sold it as follows: I sold two-thirds of this land and received the price in two installments, and the remaining third was sold on credit over twenty-eight months. Is it obligatory for me to pay zakah on it for the previous years up to the current year, or not?
Answer: Zakah is obligatory on merchandise for trade, which are goods offered for sale and purchase with the intention of making a profit, and this includes land. If a person has lands that he offers for sale with the intention of making a profit from their price, they thereby become merchandise for trade. If he buys a piece of land and offers it for sale to make a profit, it becomes an item of merchandise for trade. The questioner is asking about a piece of land he bought with the intention of trading, which remained with him for a number of years, and then he sold it for a price paid in installments. What is obligatory in this case? What is obligatory for you is to pay zakah on it for all the years that passed before the sale. As long as you offered it for sale and intended to sell it during all these years, zakah becomes obligatory on it for every year that passes. This is done by appraising it at its value at the completion of the lunar year, and then paying out one-fortieth of its value.
The value by which you appraised it, according to what it is worth on that day and at that time.
It is obligatory for you to pay zakah on it for the number of years it remained in your ownership while you waited for the profit. It is also obligatory for you to pay zakah on the value for which you sold it. As for what you have received from it, you pay zakah on it when a lunar year has passed over it. As for what remains in the buyer’s debt, you also pay zakah on it for every year if the buyer is wealthy and able to pay. However, if the buyer is bankrupt or unable to pay, and you do not know whether he will be able to fulfill the debt or not, you pay zakah on what is in his debt when you receive it and a lunar year has passed over it. You pay zakah on it for one year when you receive it, and this is sufficient, if Allah wills.
Question: And so, for one who has land from which he receives profit, is it obligatory for him to pay zakah on it every year for that year, or does he not pay zakah on it until he receives its price?
Answer: No, he pays zakah on it every year. For every year that passes while it is offered for sale, he must estimate its price at the completion of the lunar year, and then pay zakah on it just like the merchandise in his shop and others. It is an item of merchandise, appraised at what it is worth when the lunar year arrives, and zakah is paid on it, whether this appraisal is at the price for which he bought it, or more, or less.
Answer: Zakah is obligatory on merchandise for trade, which are goods offered for sale and purchase with the intention of making a profit, and this includes land. If a person has lands that he offers for sale with the intention of making a profit from their price, they thereby become merchandise for trade. If he buys a piece of land and offers it for sale to make a profit, it becomes an item of merchandise for trade. The questioner is asking about a piece of land he bought with the intention of trading, which remained with him for a number of years, and then he sold it for a price paid in installments. What is obligatory in this case? What is obligatory for you is to pay zakah on it for all the years that passed before the sale. As long as you offered it for sale and intended to sell it during all these years, zakah becomes obligatory on it for every year that passes. This is done by appraising it at its value at the completion of the lunar year, and then paying out one-fortieth of its value.
The value by which you appraised it, according to what it is worth on that day and at that time.
It is obligatory for you to pay zakah on it for the number of years it remained in your ownership while you waited for the profit. It is also obligatory for you to pay zakah on the value for which you sold it. As for what you have received from it, you pay zakah on it when a lunar year has passed over it. As for what remains in the buyer’s debt, you also pay zakah on it for every year if the buyer is wealthy and able to pay. However, if the buyer is bankrupt or unable to pay, and you do not know whether he will be able to fulfill the debt or not, you pay zakah on what is in his debt when you receive it and a lunar year has passed over it. You pay zakah on it for one year when you receive it, and this is sufficient, if Allah wills.
Question: And so, for one who has land from which he receives profit, is it obligatory for him to pay zakah on it every year for that year, or does he not pay zakah on it until he receives its price?
Answer: No, he pays zakah on it every year. For every year that passes while it is offered for sale, he must estimate its price at the completion of the lunar year, and then pay zakah on it just like the merchandise in his shop and others. It is an item of merchandise, appraised at what it is worth when the lunar year arrives, and zakah is paid on it, whether this appraisal is at the price for which he bought it, or more, or less.