Is Zakat Due on a Plot Bought for Rental Property Income or Only on the Rental Income?
Answered by Mawlana Ilyas Patel
Question
If a woman buys a plot to build a rental property for income, is zakat due on the plot itself or only on the rental income?
Answer
In the Name of Allah, the Most Merciful and Compassionate
Zakat is due on the land after a full lunar year has passed. Once the property is constructed on the land, Zakat is due only on the rental income, which should be included in the annual Zakat assessment.
Zakat on Fixed Assets Without Intention
For fixed assets like land, Zakat is not owed on land if it has only been inherited or purchased without a specific intention or as a means of storing wealth.
Zakat on Fixed Assets for Investment
If a fixed asset is purchased for investment purposes, then Zakat is due each year based on the approximate sale price of the land on the Zakat anniversary. This means that you need to assess the land’s value annually to determine whether it has increased, decreased, or remained the same. It’s essential to evaluate this to ensure that you are not overpaying or underpaying. You can choose to defer the payment each year until the land is sold; in this case, Zakat will be due for each of the previous years, calculated based on the land’s value at the time of sale. [Ibn ’Abidin, Radd al-Muhtar]
I would like you to go through the valuable answers and links below. In sha Allah, you will receive guidance and direction:
Zakat on Land and Determining Market Value
Zakat Calculator
Zakat -Comprehensive Reader
I pray this helps answer your question.
[Mawlana] Ilyas Patel
Checked and Approved by Shaykh Abdul-Rahim Reasat
Mawlana Ilyas Patel has received traditional education in various countries. He started his schooling in the UK and completed his hifz of the Quran in India. After that, he joined an Islamic seminary in the UK, where he studied secular and Aalimiyya sciences. Later, he traveled to Karachi, Pakistan, and other Middle Eastern countries to further his education. Mawlana has served as an Imam in the Republic of Ireland for several years and taught the Quran and other Islamic sciences to both children and adults. He also worked as a teacher and librarian at a local Islamic seminary in the UK for 12 years. Presently, he lives in the UK with his wife and is interested in books and gardening.
