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:

السلام عليكم ورحمة الله

I have a doubt how to pay Zakah on land and house? My colleague is having his house built on a 10 acre land (which costs five crore Indian Rupees) and I am having four lands which is costing around 50 lakhs. My brother (he is a mulla) told me that I have to pay Zakah on my land after Nisab (after my house and its plot)  can you please explain how to give Zakah? I was having cash and I bought it to get it appreciated.. but I have no plan to sell it  now (it is more than a year). There are coconuts in the lands but I am not a farmer. Can you please explain how nisab is determined for house or flats? 

If a person is having a house on a big land, he does not need to pay Zaka and other is person is having the same quantity of land in different plots he has to pay Zakah?

Your answer is appreciated as I wish to pay my Zakah in this month.

Jazaka Allahu Khair

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Answer:

Who has to pay zakah

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:

1. the value of the house/s one owns and actually lives in (no zakah)
2. the value of the car/vehicle one uses on a regular basis (no zakah)
3. the value of the furniture and fixtures one uses on a regular basis (no zakah)

Your Question: ….If a person is having a house on a big land, he does not need to pay Zaka and other is person is having the same quantity of land in different plots he has to pay Zakah?

If one lives in the house oneself, absolutely regardless of the value of the house, one is exempt in Shariah from paying ‘zakah’ on the house one actually lives in.

But if one has bought a land or a flat or a house as an investment, or to earn its rental, or for any commercial benefit whatsoever, one would indeed be liable to pay 2.50% ‘zakah’ annually on the fair market value of their property.

Your Question: I am having four lands which is costing around 50 lakhs. My brother (he is a mulla) told me that I have to pay Zakah on my land after Nisab (after my house and its plot)  can you please explain how to give Zakah? I was having cash and I bought it to get it appreciated.. but I have no plan to sell it  now (it is more than a year). There are coconuts in the lands but I am not a farmer. Can you please explain how nisab is determined for house or flats? 

Lets assume that the current market values to the four plots of lands which you own are as follows:

Land-1: $1,000.00

Land-2: $5,000.00

Land-3: $10,000.00

Land-4: $ 20,000.00

Lets assume that you actually use and live in Land-3 (value $10,000.00); ie. you reside in this plot and house yourself with your family….thus you will not be liable to pay ‘zakah’ on this particular property because you actually use and live in it yourself.

For the other 3-properties (total value $26,000.00), because you bought them with the intention of investment or to derive some commercial benefit, you would indeed be liable to pay ‘zakah’ annually at 2.50% of its current market value.

Your Question: There are coconuts in the lands but I am not a farmer.

If one has a small vegetable garden, or a few fruit trees adjacent to one’s house….and one consumes these vegetable or the fruits themselves or feeds their family, there is no ‘zakah’ on such growth.

But if one trades or sells the vegetables or fruits grown from one’s lands, then indeed one would be liable to pay the ‘zakah’ on the produce of one’s lands at 10% if irrigated naturally (by rain), and 5% if irrigated through artificial means (wells, tubes, etc.); absolutely regardless of whether one is actually a farmer or not.

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