Does one who places his money in renovating buildings to sell them owe zakah on it, and so on, with his capital always in work?
Machine translationRead the Arabic original
The Shaykh : Yes.
The questioner : We return to the original question.
The Shaykh : How?
The questioner : We return to the original question.
The Shaykh : Here, let us see.
The questioner : A man has money, and he utilizes this money in reconstructing buildings. That is, he comes upon an old building, and it is worth your money to renovate it. He obtains permits and so on, and he brings it out in a new guise and resells it. Profits come from that, and the profits are placed in the same source, and other places are developed, and so on.
And thus, the capital is always in buildings and in renovation, and the profit is transferred directly to other projects.
The Shaykh : It is converted into, yes, projects.
The questioner : So naturally, at any time of the year that he sets aside to pay zakah, he can look at how much cash he has, and the cash covers what is related to the zakah of cash. But the buildings that he takes, renovates, sells, gets others, sells, and so on, are... regarding the real estate that is renovated and sold, which he does not own except for a short period during the reconstruction, and then he resells it.
We agreed that there is no time at which he owes zakah on the money, but this moving capital is in stone, not in merchandise.
The Shaykh : I mean, I will... your example is that this man, because he keeps his capital so busy, never has a nisab at all. I am narrowing the issue for you.
The questioner : In addition, these things... are all his.
The Shaykh : So he does not pay cash zakah at all. Why? Because he does not retain a nisab. For example, if five hundred dinars accumulate with him, he goes and renovates a part of the old house, and so on.
He does not owe zakah on the cash. So your question is answered. It will be said, and the answer has preceded: this building is not rented out, it is sold. Whether it is like this or like that, when he sold it, he had liquidity. He did not leave this liquidity stagnant and hoarded such that a lunar year would pass over it and zakah would come out of it, and so on.
We say: Now, here we do not have in the Shari'ah anything that obligates zakah on this type of transaction or dealing. Why? Because these are trade goods that cannot be given in charity. Rather, as we said earlier regarding some high-value trade goods, and you gave an example after an example with a car, a Mercedes car, so when... this money that he wants to return to renovating another building, he can give from it what his soul is generous with. Just like the great rich man who has a car, but... in this car, the best is for him to appraise its value and distribute it to the poor and the needy. The same answer is applied here, and nothing else at all.
The questioner : I mean, when he sells him a building, and this... he can give from it what his soul is generous with.
The Shaykh : Yes, exactly.
The questioner : We return to the original question.
The Shaykh : How?
The questioner : We return to the original question.
The Shaykh : Here, let us see.
The questioner : A man has money, and he utilizes this money in reconstructing buildings. That is, he comes upon an old building, and it is worth your money to renovate it. He obtains permits and so on, and he brings it out in a new guise and resells it. Profits come from that, and the profits are placed in the same source, and other places are developed, and so on.
And thus, the capital is always in buildings and in renovation, and the profit is transferred directly to other projects.
The Shaykh : It is converted into, yes, projects.
The questioner : So naturally, at any time of the year that he sets aside to pay zakah, he can look at how much cash he has, and the cash covers what is related to the zakah of cash. But the buildings that he takes, renovates, sells, gets others, sells, and so on, are... regarding the real estate that is renovated and sold, which he does not own except for a short period during the reconstruction, and then he resells it.
We agreed that there is no time at which he owes zakah on the money, but this moving capital is in stone, not in merchandise.
The Shaykh : I mean, I will... your example is that this man, because he keeps his capital so busy, never has a nisab at all. I am narrowing the issue for you.
The questioner : In addition, these things... are all his.
The Shaykh : So he does not pay cash zakah at all. Why? Because he does not retain a nisab. For example, if five hundred dinars accumulate with him, he goes and renovates a part of the old house, and so on.
He does not owe zakah on the cash. So your question is answered. It will be said, and the answer has preceded: this building is not rented out, it is sold. Whether it is like this or like that, when he sold it, he had liquidity. He did not leave this liquidity stagnant and hoarded such that a lunar year would pass over it and zakah would come out of it, and so on.
We say: Now, here we do not have in the Shari'ah anything that obligates zakah on this type of transaction or dealing. Why? Because these are trade goods that cannot be given in charity. Rather, as we said earlier regarding some high-value trade goods, and you gave an example after an example with a car, a Mercedes car, so when... this money that he wants to return to renovating another building, he can give from it what his soul is generous with. Just like the great rich man who has a car, but... in this car, the best is for him to appraise its value and distribute it to the poor and the needy. The same answer is applied here, and nothing else at all.
The questioner : I mean, when he sells him a building, and this... he can give from it what his soul is generous with.
The Shaykh : Yes, exactly.
Source
www.al-albany.com
The Arabic text is copied verbatim from the original source, without any edits.