Pay zakah on investments.
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:
SALAMS DEAR BROTHERS
PLS SHED MORE LIGHT ON ZAKAT. LIKE WE HAVE PROPERTY INVESTMENTS IN DUBAI IN OFF PLAN PROPERTIES AND NOW WE DONT KNOW WHETHER WE WILL GET THE MONEY BACK OR MONEYS WORTH AS WE HAVE PAID ONLY BOOKING DEPOSITS AND VALUES HAVE COME DOWN MORE THAN 50-80%
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Pay zakah on investments
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$2,500.00), 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 ones assets (properties, investments, jewelry, cash, etc.) except:
- the value of the house/s one owns and actually lives in (no zakah)
- the value of the car/vehicle one uses on a regular basis (no zakah)
- the value of the furniture and fixtures one uses on a regular basis (no zakah)
Your Question: LIKE WE HAVE PROPERTY INVESTMENTS IN DUBAI IN OFF PLAN PROPERTIES AND NOW WE DONT KNOW WHETHER WE WILL GET THE MONEY BACK OR MONEYS WORTH AS WE HAVE PAID ONLY BOOKING DEPOSITS AND VALUES HAVE COME DOWN MORE THAN 50-80%
Scenario-1: Value of investment have depreciated 80%.
If you paid a booking deposit of say $10,000.00 and the market value of the invested property has depreciated say 80% to $2,000.00; you would be liable to pay zakah on the current value of your investment would be 2.50% of $2,000.00 for this year.
Scenario-2: Uncertain whether the money invested will be returned, or fear the property will never be made, etc.
If you paid a booking deposit of say $10,000.00 and fear that the property might never be made or whether the money will ever be returned, you are well within your rights to delay the paying of the zakah for this investment until you actually receive the money back or the property deed is sellable. If and when the investment materializes, you can pay the zakah dues for the number of years you held the asset without paying its zakah. If the investment never materializes, you obviously are not liable to pay any zakah on that lost investment.
Whatever written of Truth and benefit is only due to Allahs 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,