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:

Assalam alaikum

How zakat would be calculated on the value of the land.  There are two types of values.  1) Government Value and 2) Market Value. Both the values differs.

So my question is,  Shall we calculate zakat based on the current Government Value or the current Market Value?

JazakAllah Khair

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Answer:

Zakah on value of land

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.

‘Zakah’ in Islam will be determined at 2.50% of the fair market value of the excess asset at the end of each lunar year.

If the land one owns is agricultural land, then there is ‘zakah’ on the value of the land, but rather ‘zakah’ will be determined annually on the produce from the land…..10.00% of the produce of the land if the land is irrigated by natural means (rain, etc.), and 5.00% if the land is irrigated by artificial means (wells, tubes, etc.).

But if the land in question has been purchased as an investment, then the annual ‘zakah’ will be determined at a fair market value of the land at the end of each lunar year.

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