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Is zakat payable on plot of land

+2 votes
asked May 19, 2016 in General advice by usman (1,730 points)
Dear all,

Is zakat payable on plot of land? If yes then is it based on current worth of land or based on purchased value?


5 Answers

+1 vote
answered May 19, 2016 by Ahmed (1,560 points)
selected May 19, 2016 by usman
Best answer
All depends on your intention. Simple answer is if property investment is business for you then you must pay zakat.  If you buy land for yourself or dependents to live then zakat is not payable.

"If the intention in buying or holding the plot of land is for business or to sell it when the value increases,  the zakat of 2.5% of the market value of the land has to be paid.  If the intention of buying or holding the plot of land is to build ones own house and staying in it,  then there is no zakat on it.

In case the land is bought or held for selling when the value increases later,  and the person has no cash;  there is no harm if he accounts to pay the 2.5% zakah due every year in one lump-sum when he actually sells the land."

It doesnt matter how long is the investment period.  You must pay zakat if your intention is to gain profit from your investment after selling and you dont plan to keep this land or property for yourself or your dependents.

Its a good idea to pay more zakat. Paying more is sadka and saves you from evil.
+1 vote
answered May 19, 2016 by Abdullah (610 points)

If the person lives in the house himself or shares house with tenant  then no zakaah Is applicable. But zakkah is applicable on savings that exceed nasab. 

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 ask to pay zakaah on the rented house as artificially irrigated agricultural that case,  the owner must pay a 5% zakaah on the gross annual rent.

0 votes
answered May 19, 2016 by Ahmed (1,560 points)

Zakah is also applicable on shares business.  You must pay 2.5% of the market value of the shares.  If the market value is high,  and the person has no cash,  he may account for the 2.5% zakah due every year and pay it in one lump-sum when he actually sells the shares.

0 votes
answered May 19, 2016 by usman (1,730 points)
Is zakah also applicable on rental income of the property?
0 votes
answered May 25, 2016 by anes (790 points)
edited Jun 24, 2016 by anes
JazakAllah.  Very helpful answers..

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