Category: Riba, Loans and Working in Banks

The ruling on taking a Loan from a Real Estate Development Fund for someone who is wealthy

Question :

I am a man who borrowed some money from a real estate expansion fund to build a villa, and my situations are good - and all praise is due to Allâh. After building it I still remain in good condition financially. Then, after a period of time I rented it out to someone. The question is, is there any sin on me for what I did, and is there any Zakah due on the rental money?

Answer:

Since the government - may Allah give it success - opened this Real Estate Fund, and the intention of it was to relieve the housing crisis and what occurs sometimes of hardships, the government allowed every (Saudi) citizen to borrow from it under well-known conditions. They did not make any distinction between a wealthy person and a poor person. It makes no difference whether the borrower built the house for living in or renting. Thus, there is no harm in that and this person's dealing is correct, if Allâh wills. In reference to Az- Zakah, it is not due on the houses and buildings themselves. It is only due on the rent money if it remains with the owner until a year passes with it in his possession. So, if he spent it or used it to pay off a debt, there is no Zakah due on it.

Source:
Ash-Shaykh Ibn Jibreen
Fatawa Islamiyah, Vol. 3 Pages 418-419