Is zakah obligatory on land every year, or is it paid only once upon sale?
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The questioner : The questioner says, "I have a piece of land that I purchased."
The Shaykh : I have.
The questioner : I have a piece of land that I purchased four years ago for seventy thousand riyals. Then its price dropped. Do I pay zakah on it every year, or only when I sell it?
The Shaykh : No. He pays zakah every year. But he pays it based on its current value. For example, if in the second year it is worth fifty thousand, and he bought it for seventy thousand, how much does he pay? Fifty thousand. In the third year, if it is worth forty thousand, he pays forty thousand. In the fourth year, if it is worth thirty thousand, he pays thirty thousand. However, he might say, "I do not have money," meaning I do not have liquid cash. We say, "Praise be to Allah, it is recorded as a debt, and when he sells it, he will pay the zakah for the past years."
The questioner : May Allah reward you with good.
The Shaykh : I have.
The questioner : I have a piece of land that I purchased four years ago for seventy thousand riyals. Then its price dropped. Do I pay zakah on it every year, or only when I sell it?
The Shaykh : No. He pays zakah every year. But he pays it based on its current value. For example, if in the second year it is worth fifty thousand, and he bought it for seventy thousand, how much does he pay? Fifty thousand. In the third year, if it is worth forty thousand, he pays forty thousand. In the fourth year, if it is worth thirty thousand, he pays thirty thousand. However, he might say, "I do not have money," meaning I do not have liquid cash. We say, "Praise be to Allah, it is recorded as a debt, and when he sells it, he will pay the zakah for the past years."
The questioner : May Allah reward you with good.