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


Answer:



بسم الله الرحمن الرحيم

We begin with Allah’s blessed name, we praise him and we glorify him, seek his forgiveness and ask him to guide us. Whoever Allah guides, None can lead astray and whoever he misguides, None can guide. There is no power and no strength except from Allah, The most high, the Most great, the most powerful. We bear witness that there is no one worthy of worship but Allah Alone, and we bear witness that Prophet Muhammad (pbuh) is His slave-servant and the seal of His Messengers. We pray for peace and blessings on all the noble messengers and in particular on the last of them all “the blessed prophet Mohammad (pbuh)”

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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Category:Zakah

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