Question & Answer
When and what zakat is due on a plot purchased for investment?


بسم الله الرحمن الرحيم

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There arise two scenarios:

  1. If one buys the land with the aim of selling it in the future with some profit, then The zakah on the land brought after full lunar calendar year is 2.5% of the total market value of the land.
  2. If one buys the land in order to develop buildings on it and earn the rent from the buildings, then the land itself is not liable to zakah, rather zakah is due on its revenue. If one receives the rent money that passes the Nissab, and one year has passed since the rental contract was drawn up, then he must pay zakah on it.
And Allah alone knows the best.

I ask Allah to make this a sincere effort, seeking his pleasure, and I ask him to grant us refuge in him from the evils within ourselves, and that in our deeds. I ask him to grant us success in achieving whatever pleases him; And May Allah Shower His blessings and mercy upon our beloved Prophet Muhammad (pbuh), his family and his Companions and on all those who follow him until the final hour.

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