Zakah on property
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:
Aslmalkm. From September 2009, I have been paying monthly & regular instalments for an apartment. The intention of investing in this apartment was probably to rent it or sell it at a later date. I still have about 15% of the total value + registration charges to be paid, expected to be paid up in the next 5-6 months. I usually give my annual Zakath during the Ramadan month, so, should I now pay Zakath for this property which is not yet in my name and for which I have not yet paid up the full amount? Kindly advise. Thanks.
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Zakah on property
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Lets say the apartment you intend to purchase was valued in Sep-2009 for 100,000.00 and you have to date paid up 85% of the value or 85,000.00.
And lets say, after a period of 12 calendar months, the apartment today is worth 120,000.00.
Regardless of whether the apartment is registered in your name yet or not, and regardless of whether or not you have fully paid up for the apartment.you would be liable to pay the annual zakah on your share of the current value of the apartment.
The 85,000.00 which you have paid up, plus the 20,000.00 increase in the value of your apartment during the calendar year.
Thus, according to the above quoted assumptions, you would be liable to pay 2.50% of 85,000+20,000.00 = 105,000.00 or 2,625.00 as your annual zakah.
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