Q: What is the Shari’ah position with regards to zakāh on Murabaha home purchase plans?
الجواب حامدًا و مصليًا و منه الصدق و الصواب
A: Under the Murabahah home purchase plan the client incurs a debt for the balance of the purchase price that is payable over an extended period [typically 25 years as mentioned].
The normal rule, as discussed in jurisprudential texts, is that outstanding debts are deductible from one’s zakatable assets. The rationale provided for this rule is that to settle one’s outstanding debt is a basic necessity in order that one may protect oneself from punitive measures from one’s creditors.
However, it is the opinion of the Al-Qalam Shariah Panel [alongside many other contemporary scholars] that the entire sum of outstanding debt incurred under the Murabahah home purchase plan will not be deducted from one’s zakatable assets in order to arrive at one’s liability of zakāh. Rather, only the outstanding sum payable for the coming lunar year will be deducted.
The basis of this opinion is that it is only the latter sum that is being demanded until the next potential zakāh liability date, and payment of which provides safeguard from any punitive measure from one’s creditors. Settlement of the remaining outstanding amount is not from one’s basic necessity, as there is no demand for payment of the latter for the coming lunar year.
For a detailed breakdown, please see the Zakāh on Islamic Home Purchase Plans and Categorisation of Debts for Zakāh Purposes research papers available at the Al Qalam website.