He says: I bought two plots of land, the first for the purpose of residence and the second for the purpose of making a profit. Is there zakah on the two plots or not? And if there is zakah on them, is it assessed based on their purchase price or their current value, i.e., what they are worth at the present time? And are real estate properties, such as houses and farms, considered items of trade or not?
Machine translationRead the Arabic original
The questioner : He says: I bought two plots of land, the first for the purpose of residence and the second for the purpose of making a profit. Is there zakah on the two plots or not? And if there is zakah on them, is it assessed based on their purchase price or their current value, i.e., what they are worth at the present time? And are real estate properties, such as houses and farms, considered items of trade or not?
The Shaykh : As for the plot you bought to develop for residence, there is no zakah on it. As for the one you bought for the purpose of making a profit, it is among the items of trade. Accordingly, its zakah is obligatory on you every year. The method of paying the zakah is to assess its value at the time zakah becomes obligatory based on what it is worth, and then you give out one-fortieth of the value. That is, you divide the value by forty, and the result of the division is the zakah.
The questioner : Yes.
The Shaykh : You do not consider what you paid for it, but rather you consider what it is worth at the time zakah becomes obligatory, whether it is less than what you paid for it, more, or equal to it.
However, there is an issue here, which is that some people say: "The value may be difficult for me to determine at the time zakah becomes obligatory, so I do not know if it is worth more than what I paid for it, less, or equal to what I paid for it?" We say in this case: Pay zakah on the capital, because it is certain, while the decrease and the profit are doubtful. And whatever is doubtful, the original state is its absence.
The questioner : Yes.
The Shaykh : As for farms and orchards intended for cultivation, there is no zakah on them. Rather, the zakah is on what is obtained from them that is subject to zakah. Not everything obtained from orchards is subject to zakah; vegetables, watermelons, and the like do not have zakah on them. Yes.
The Shaykh : As for the plot you bought to develop for residence, there is no zakah on it. As for the one you bought for the purpose of making a profit, it is among the items of trade. Accordingly, its zakah is obligatory on you every year. The method of paying the zakah is to assess its value at the time zakah becomes obligatory based on what it is worth, and then you give out one-fortieth of the value. That is, you divide the value by forty, and the result of the division is the zakah.
The questioner : Yes.
The Shaykh : You do not consider what you paid for it, but rather you consider what it is worth at the time zakah becomes obligatory, whether it is less than what you paid for it, more, or equal to it.
However, there is an issue here, which is that some people say: "The value may be difficult for me to determine at the time zakah becomes obligatory, so I do not know if it is worth more than what I paid for it, less, or equal to what I paid for it?" We say in this case: Pay zakah on the capital, because it is certain, while the decrease and the profit are doubtful. And whatever is doubtful, the original state is its absence.
The questioner : Yes.
The Shaykh : As for farms and orchards intended for cultivation, there is no zakah on them. Rather, the zakah is on what is obtained from them that is subject to zakah. Not everything obtained from orchards is subject to zakah; vegetables, watermelons, and the like do not have zakah on them. Yes.