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Zakat on Property,

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   Ahmad Khan
Wednesday, August 19, 2009 08:44 AM 
Reply: >
Dear Sir,


Can somebody throw light on does one have to pay zakat on property that was bought for investment purposes.


ahmad
Adnan Akbar replied on Wednesday, August 19, 2009 09:27 AM 

Salamalykum,
If you dont intend to reside in that property and have a view to sell it at later stage, you have to pay zakat of 2.5% on the market value of the property.

And Allah tala knows best

Fi Aman Allah
irf doha replied on Wednesday, August 19, 2009 09:32 AM 

Yes my understanding is if intention is investment purposes u will have to pay zakat based on current value

Ihave found a very good n simple excel file where u can enter all data and calculate I am planning to make it little more friendly and will share with you

My experience with zakat is that it always increase and protect your wealth never hestitate for a second to pay this obligation friends
Ahmad replied on Wednesday, August 19, 2009 11:10 AM 

Thankyou
ashraf replied on Wednesday, August 19, 2009 11:39 AM 

NO ZAKAT on real estate invesment (term investment is buisness and you dony pay zakat on buinsess deals)this is my feeling , i am sure well educated scholars (not mullahas) can answer more .
Real Money replied on Wednesday, August 19, 2009 12:33 PM 

Yes, if you do not intend to reside in the property and if it is for investment purposes.
There are two possibilities.
(1)You are renting to get rental income out of it.

In this case you do not have to pay the Zakat on the value of the property. You will pay the Zakat only on the rental income. If it is above the limit.
Even you do not have to keep the separate record for it. You can add it in other types of income and at the end of the year you can calculate all your commodities+ bank balance etc to pay the Zakat at 2.5% (you will not count your real estate in this case as commodity and hence you will not pay Zakat for it).

(2)You are using real estate as commodity. This mean that you intend to generate profits from the sales and purchase of the real estate (in contrast to rental income)
In this case you have to count your real estate just as you money in the bank. This mean that you will pay zakat on it
For any specific question you may call me
whatever replied on Thursday, August 20, 2009 04:00 AM 

Zakat is compulsory on everything including your investments which are lying useless for one year. But yes, if you are doing business & you sell it before 1 year passes then their is no Zakat on it. Similarly business money which you have put in the bank and you aren't using it for last 1 year, then zakat is due on that as well.. and similarly, if you have an house which is rented then their is no zakat on house, also neither any zakat on rental money.. unless that money crosses one year useless. The main Idea is if you are circulating the money then their is no zakat on it (which actually means you are doing business). Also let suppose you crop some crops on that land, then their is no zakat on it. but yet you need to pay zakat on crops income, or if those are your own then no zakat.. (of course you don't store for 2 years, but just 1 year):)
dr ali replied on Thursday, August 20, 2009 06:00 AM 

if u have more than one house or plot in different cities/locations and cant decide at the moment where to live or whom plot u will retain for rental purpose and whom u sell off , than how to calculate the zakat . thnx
Just a thought replied on Thursday, August 20, 2009 02:41 PM 

Dear Dr. Ali, in your case if you are totally unsure then to be on the safe side and also it won't harm if you pay Zakat on the higher value property. This is just my personal feeling.
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