Question: 5 people, including Zayd, bought an investment property together. Zayd’s primary intention in buying the property is to generate income through receiving rent payments. He has not bought it with the intention to sell. Like Zayd, Zayd’s partners have bought the house with the intention to make money through rent that they will receive. However, unlike Zayd, they have the additional intention that they will sell the property after 5 years if it is profitable to do so (otherwise they will keep it).
- Do Zayd’s partners need to give Zakaat on the value of this investment property?
- Does Zayd need to give Zakaat on the value of this investment property
Answer:
الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب
- Zayd’s partners are not liable to give zakat on the pro rata value of the investment property as they remain undecided as to whether they will sell or not.
في الدر المختار: ولو نوى التجارة بعد العقد أو اشترى شيئا للقنية ناويا أنه إن وجد ربحا باعه لا زكاة عليه.
[كتاب الزكاة]
However, if they made the intention at the time of purchase that they would sell the house when the conditions are right they are liable to zakat on the pro rata value of the of the investment property.
- Zayd is not liable to give zakat on the pro rata value of the investment property.
And Allah knows best.
Mufti Mohammed Zubair Butt
Chair, Al-Qalam Shariah Scholars Panel