Zakah determinations.
Mu' meneen Brothers and Sisters,
As Salaam Aleikum wa Rahmatullahi wa Barakatuh.
(May Allah's Peace, Mercy and Blessings be upon all of you)
One of our brothers/sisters has asked
this question:
What is the zakath to be paid on house bought, after
making a partial payment?
The balance amount is being paid in monthly installments.
The house at present is on rent, which in turn is used to
make the balance payment.
(There may be some grammatical and spelling
errors in the above statement. The forum does not change anything from
questions, comments and statements received from our readers for circulation in
confidentiality.)
Answer:
Zakah determinations
In the name of Allah, We praise Him, seek His
help and ask for His forgiveness. Whoever Allah guides none can misguide,
and whoever He allows to fall astray, none can guide them aright. We bear
witness that there is none worthy of worship but Allah Alone, and we bear
witness that Muhammad (saws) is His slave-servant and the seal of His
Messengers.
If the total net worth of any believer (man, woman, or
child) is more than the prescribed ‘nisaab’ of 7.5 ‘tolas’ of gold (app. 85
grams or app. Value US$2,100.00), then the person is liable to pay the
obligatory annual ‘zakah’ of 2.5% on their excess wealth which has been in
their possession for a full calendar year.
If the total net worth of any believer is less than the
prescribed ‘nisaab’, he/she is not liable to pay any ‘zakah’ until their net
worth exceeds the prescribed ‘nisaab’.
For the purpose of determining ‘zakah’, the ‘Net Excess
Assets’ would be the current market value of all of one’s assets (properties,
investments, jewelry, cash, etc.) except:
- the
value of the house/s one owns and actually lives in
- the
value of the car/vehicle one uses on a regular basis
- the
value of the furniture and fixtures one uses on a regular basis.
Your
Question:
What is the zakath to be paid on house bought, after making
a partial payment?
The balance amount is being paid in monthly installments.
The house at present is on rent, which in turn is used to
make the balance payment.
Lets assume you bought the house a year ago the value of
which was 100,000.00; lets assume you made an initial partial payment of
25,000.00 and over the course of the year you paid another 5,000.00 towards the
house (regardless of whether from the rental income of the house or any other
source). Today, one year after you
purchased the house, the fair market value of the house is 110,000.00.
In such a scenario, you will be liable to pay ‘zakah’ for
this year on 25,000.00 (your initial investment) + the 5,000.00 (your
subsequent payments towards the house) + 10,000.00 (the increase in the value
of the house); thus for the year your ‘zakah’ for the property will be 2.50% of
40,000.00 or 1,000.00.
Whatever written of Truth and benefit is only
due to Allah’s Assistance and Guidance, and whatever of error is of me
alone. Allah Alone Knows Best and He is
the Only Source of Strength.
Your brother and
well wisher in Islam,
Burhan