Az-Zakah on Land, Real-Estate Properties, Places used for Business and Merchandise for Sale

Land that is kept for building does not require payment of Az-Zakah

Question :

I have a piece of land that I bought with the intent of sell it, so I sold it. Is there any Zakah due on me for the period of time that I was not trying to sell it?

Answer:

If the matter is as you mentioned in the question, there is no Zakah due on you for whatever time passed before the sale. This is because the reason that necessitates the payment of Az-Zakah is not present, which is the intent to sell, and you were not intending to sell it.

Question :

There is no Zakah on Land that is kept for building, regardless if the building is for a personal residence or for renting.

I am a young Egyptian man who works in Saudi Arabia. In Egypt, I live in a house that I rent. This means that I do not own a private house in Egypt that I live in. Then, Allâh, Glorified is He and the Most High, provided me with some wealth and I bought a piece of land in my country. Its value is 8,500 Egyptian Junayhs (pounds). I also have 17,500 Egyptian Junayhs in an Islamic bank in Egypt that is specifically for the purpose of building a place on this land just like the house that I live in with my family. My question is, is there any Zakah due on this piece of land? If there is, how much is it? Is there any Zakah due on this sum of money that is specifically for building on this land? If so, how much is it?

Answer:

There is no Zakah due on the land that is intended to be used for building, regardless of whether the building is for living in or renting. Verily, Az-Zakah is on that which is intended to be used for business and selling, as opposed to that which is kept for the purpose of private usage or a residence, like this land mentioned. In reference to the money that is kept in the bank, then Az-Zakah has to be paid on it as long as it is cash, even if it is intended for a specific purpose, like building a home, marriage or buying specific needs. The amount of Az-Zakah on the money is 2.5%, which is only 25 Junayhs for every 1000 Junayhs.

Az-Zakah on Land

Question :

I own a piece of land that I do not benefit from. I am leaving it for a time when I may need it. Is it obligatory upon me to pay any Zakah on this land? If I pay Az-Zakah on it, do I have to estimate its valued price each time?

Answer:

There is no Zakah due upon you for this land, because Az- Zakah is only due on the value of sale products if they are kept for the purpose of business (i.e., selling). Land, real-estate property, cars, furniture and other similar things are items on which no Zakah is due by themselves. If wealth is intended by them - I mean money - by being kept with the intent of buying, selling and trading, then Az-Zakah is obligatory on their value. If it is not kept for sale, like you mentioned in your question, then there is no Zakah due on that.

Az-Zakah on Lands that are kept with the intent of selling

Question :

What is the ruling of Az-Zakah on lands that are kept with the intent of buying and selling?

Answer:

Az-Zakah is obligatory on lands that are kept with the intent of buying and selling, because they are considered products of sale. Therefore, they are included in the generality of the evidences concerning the obligation of Az-Zakah in the Book and the Sunnah, as is Allâh's Statement:
"Take Sadaqah (charity) from their wealth in order to cleanse them and purify them with it."

There is also that which Abu Dawud recorded with a good chain of narration from Samurah bin Jundub that he said, "The Messenger of Allâh commanded us to give charity for whatever we kept for sale." The majority of the people of knowledge have ruled according to this and it is the truth. May Allah send blessings and peace upon our Prophet Muhammad.

Az-Zakah is obligatory on Land that is kept with the intent of sale

Question :

The local authorities granted me some land from the lands that are allotted for those who have limited income. This occurred three years ago and I intend with myself that I will sell this land if it brings a suitable price, as its location is not suitable for me. The question is, is there any Zakah due on this land? If there is any Zakah due on it, should I pay the Zakah for the three years or for one year? Please give me a ruling, and may Allah bless you.

Answer:

If you intended to sell it, then you are obligated to pay the Zakah of its value when a year passes from the time you decided to sell it. This is due to what Abu Dawud recorded from Samurah bin Jundub that he said: "The Messenger of Allâh commanded us to give charity for whatever we kept for sale."
This narration has supporting evidences that allude to its meaning. And success is from Allâh.

Az-Zakah on Buildings, Places and Lands

Question :

I have a brother who possesses a lot of wealth. He placed his wealth in buildings, places of business and lands, and all of them bring income. I advised him to pay the Zakah on the original capital (i.e., properties) of his business, but he told me that he is only obligated to pay Zakah on the rent that he collects if he keeps it for a year, and there is no Zakah on his original property. He said that if every time he got the rent he put it into a building, he is not obligated to pay Az-Zakah on it (the rent money) or its origin (i.e., the property), except if he kept the rent money for a year before putting it into a building. This brother of mine has partners who do the same as he does. Does Islam permit this action? Is the one who does it not committing any sin? What is the real estate which Az-Zakah is not obligatory on its origin (the building or property) or its operation until a year passes? Is there any limit where this is stopped or is it all the same, whether small in amount or a lot?

Answer:

The wealth that a person possesses is of different types. Whatever is considered money, then Az-Zakah is obliga- tory on it if it reaches the minimum amount required for Az- Zakah and it is possessed for a year. Whatever land is used for planting crops, then Az-Zakah is obligatory on its grains and fruits on the day of its harvest. Az-Zakah is not due on the land itself. Whatever land is rented or a building that is rented, Az- Zakah is obligatory on the rental money if the owner possesses that money for a year and it reaches the minimum amount required for Az-Zakah. There is no Zakah due on the land or the building itself. Whatever land, buildings or other items are kept for the purpose of selling, then Az-Zakah is obligatory on them if these are possessed for a year. Whatever profit comes from it during that year, it is considered with the year of the original property, if the original property was the minimum amount required for Az-Zakah. Whatever livestock animals a person owns, he is obligated to pay Az-Zakah on them if they reach the minimum number required and he has possessed them for a year.

Az-Zakah on Rent collected from a Residence and places of Business

Question :

There is a man who has many residences that he rents out and he saves a lot of money from them during an entire year. Does he have to pay Az-Zakah on this wealth? When is it due? What is the amount that he has to pay?

Answer:

If a year passes on the rent of a residence or a shop or any other type of money, Az-Zakah is due on it if it is the minimum amount required for Az-Zakah. Whatever the lessor (i.e., the one who rents out the property) spends of it on his needs before possessing it for a year, there is no Zakah due on that. The amount that is due on this money is 2.5% according to the consensus of the Muslims. The minimum amount required before Az-Zakah is due is 20 Mithaal of gold. Its amount in Saudi and European Junayhs (pounds) is 113/7 Junayhs. The minimum amount required for silver is 140 Mithaal. Its amount in Saudi riyals is 56 silver riyals.

Az-Zakah on rental Property

Question :

I have some property that brings returns, but not on a yearly basis. Instead, teachers rent it for nine months. I have another property that is rented on a yearly basis. When the rent is paid, I like to give whatever is due upon me of the obligatory Zakah. Does Az-Zakah have to be paid on the rent of the monthly rental property?

Answer:

Az-Zakah is obligatory on the rent of rental property if the conditions are present which necessitate the payment of Az-Zakah. From these conditions is that the sum must reach the minimum amount that requires Az-Zakah and the money must be possessed for an entire year. Az-Zakah is not obligatory on the value of property that is rented unless its owner purchases and sells it in order to avoid paying Az-Zakah on its price. This is in dealing with him in opposition to his intent (i.e., his intent to escape from paying the Az-Zakah).

Az-Zakah on Houses and Cars

Question :

There is a man who has vehicles and houses and he spends what he earns from them on his family. This is such that he does not save any money during an entire year. Does he have to pay Az-Zakah on this wealth? When is Az- Zakah due on cars and houses and what is the amount to be paid?

Answer:

If the houses and vehicles are for possession (i.e., not for sale) or to benefit from renting them, there is no Zakah on them. However, if they are for sale or some of them are for sale, then it is obligatory upon you to pay the Zakah of their value every time a year passes and they are in your possession. If you use them for the personal needs of your house or ways of righteousness or for other needs before a year passes, then you do not have to pay any Zakah on them. This is due to the generality of the evidences reported in this regard from the Qur'anic Verses and Hadiths. It is also due to what Abu Dawud recorded with a good chain of narration from the Prophet that he commanded charity to be given on whatever was kept for sale.

Az-Zakah on Cars that are kept for rental

Question :

How is Az-Zakah to be paid on transport vehicles and rental cars? Is it based on their value or their earnings?

Answer:

As long as these vehicles are used for rental, Az-Zakah is obligatory on their rental fee if they have been rented for a year. There is no Zakah on their value.

There is no Zakah on Cars that are kept for transporting things

Question :

Is there any Zakah on business vehicles that travel and bring grains and other things?

Answer:

There is no Zakah on vehicles and camels that are kept for transporting grains, supplies and other things from one land to another. This is because they are not kept for selling. They are only kept for transport and use. However, if the vehicles are kept for sale and other things as well, such as camels, donkeys, cows and other animals that are permissible to sell, then it is obligatory to pay Az-Zakah on them. This is due to what Abu Dawud and others recorded from Samurah bin Jundub that he said: "The Messenger of Allâh commanded us to give charity for whatever we kept for sale." This is the position held by the majority of the people of knowledge and this has been mentioned by Imam Abu Bakr bin Al-Munthir.

How does the Owner of a printing Company pay Az-Zakah?

Question :

The owner of a printing company asked about its Zakah, as there are those who say that Az-Zakah is due on whatever the printing company produces. There are also those who say Az-Zakah is due on the equipment and machines of the printing company as well as its products. What is correct concerning this?

Answer:

Az-Zakah is only obligatory on owners of printing companies, factories and their likes, for the things that they keep for sale. In reference to the things that they keep for use, there is no Zakah on them. The case is the same for cars, furniture and tools that are kept for use. There is no Zakah on these things. This is due to what Abu Dawud recorded in his Sunan with a good chain of narration from Samurah bin Jundub that he said: "The Messenger of Allâh commanded us to give charity for whatever we kept for sale." In reference to the money, such as gold, silver and cash currencies, Az-Zakah is obligatory on all of it, even if it is kept for spending, if it reaches the minimum amount required for Az-Zakah and it has been kept for a year. And success is from Allâh.

How to pay Az-Zakah on Commodities such as Fabrics and similar things

Question :

There is a man who has places of business that contain many types of merchandise, like fabrics, shoes and perfumes. So, how does he pay their Zakah?

Answer:

Everyone who has merchandise for sale, regardless of whether it is fabrics or anything else, he must pay the Zakah of its value if he has possessed it for a year, along with cash that he has. This is due to what Abu Dawud recorded with a good chain of narration from Samurah bin Jundub that he said: "The Messenger of Allâh commanded us to give charity for whatever we kept for sale." This is also due to other evidences that the people of knowledge have mentioned in the chapters concerning Az-Zakah on products for sale.

How to pay Az-Zakah on Chickens

Question :

Is it permissible for me to pay Az-Zakah of a chicken farm based upon its value in money?

Answer:

All of what the Muslim keeps of wealth that is for sale, regardless of whether it is animals or other than animals, then he pays Az-Zakah on its value when a complete year passes. This is due to what Abu Dawud recorded from Samurah bin Jundub that he said: "The Messenger of Allâh commanded us to give charity for whatever we kept for sale." This is also due to other evidences concerning this. The value of the sale (ie., the sale price) is not what is considered. Rather, what is considered is the value of the merchandise that is kept for selling, after it has been possessed for an entire year. It makes no difference whether its value at the completion of one year is less than its price or more. And Allâh is the Giver of success.

Source:
Fatawa Islamiyah, Vol. 3 Pages 166-167-168-169-170

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