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:

Zakaat. aoa how does one calculate zakaat on a rental property. would it be the rent subtracting the expenses. or 5% of the property value. thanks allah hafiz.

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Answer:

Calculate Zakat on rental property

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 no one (no idol, no person, no grave, no prophet, no imam, no dai, nobody!) 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 person lives in the house himself, then there is no zakaah on the house. But if the person has given the house out on rent to someone else, he does not have to pay zakat on the property value, but rather he must pay 2.5% of the gross annual rent as the zakaah for his property. Some scholars have also opined that the calculation of the zakaah on the rented house should be treated like the calculation of artificially irrigated agricultural land, and the owner must pay a 5% zakaah on the gross annual rent.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me. Allah Alone Knows Best and He is the Only Source of Strength.

Your Brother in Islam,

Burhan