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:

I own a house where I am presently staying. I have also purchased around a year back a bigger house where I finally intend to stay. there is renovation work on and Inshallah it should be completed in about a fortnight. I have purchased the second house for staying over there and not for resale and since there were some leakage problem I could not shift. Can you please let me know if i have to pay Zakat on the second house and if yes how do we calculate the zakat amount. My intentions are to shift to the new house and give the old on rental basis.

 

(There may be some grammatical and spelling errors in the above statement. The forum does not change anything from questions, comments and statements received from our readers for circulation in confidentiality.)

 

Answer:

 

Zakah on house

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.

 

For the purpose of determining ‘zakah’, the ‘Net Excess Assets’ would be the current market value of all of one’s assets (properties, jewelry, cash, etc.) except:

1. the value of the house one owns and actually lives in
2. the value of the car/vehicle one uses on a regular basis
3. the value of the furniture and fixtures one uses on a regular basis.

 

Lets say the current market value of the house you live in currently is $10,000.00, and the new house you have bought with the intention of living in it is worth $20,000.00. 

 

Thus for this year, you will be exempt from paying ‘zakah’ on the house you currently live, but will have to pay the ‘zakah’ on the current market value of the new house at the rate of 2.50%.

 

When you move into the new house, at the end of the calendar year, absolutely irrespective of the annual rent it generates or does not generate, you will be liable to pay ‘zakah’ on the market value of your old house at the rate of 2.50%.

 

Basically, one is exempt from paying any ‘zakah’ on the value of the house one actually lives in…for all other property or assets or savings which have been in one’s possession for a period of one full calendar year, one will be liable to pay ‘zakah’ on its market value.

 

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