@@@ Zakat on Land bought to Hold @@@
105334: If the land does not sell, is zakaah due on it?
I have bought some land, intending to sell it when its value increases. But its value decreased and it did not sell, it remained in my possession for 10 years and its value did not increase, should I pay Zakah on it?.
Praise be to Allaah.
Land that is bought with the intention of selling it after a while when prices have increased is subject to zakaah, because it comes under the heading of trade goods.
The value of trade goods should be worked out at the end of the year based on the current market price, regardless of the price for which they were bought, and zakaah must be paid. The rate of zakaah is one quarter of one tenth.
See the answer to question no. 38886.
Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) was asked: I have a piece of land and I am waiting for the prices of land to go up so that I can sell it, and it has been several years. Should I pay zakaah on it?
He replied: If a person buys land to make a profit then the land does not sell and becomes cheaper, and he keeps it until the price goes up, then he must pay zakaah on it every year, because it comes under the heading of trade goods. If he does not have anything with which to pay the zakaah, and he cannot find a buyer, then he should work out its price at the time when zakaah becomes obligatory and work out its zakaah, and in the following year he should work out the zakaah on its value, then in the third year and so on. Then whenever he sells it he should pay the total amount of zakaah that he had calculated. End quote.
Majmoo’ al-Fataawa (18/225).
He was also asked about a person who bought some land with the aim of trading in it, but it remained in his possession for a number of years. Does he have to pay zakaah on it?
He replied: If a person buys land for trading, then he has to pay zakaah every year, whether the value increases or decreases, and whether it sells quickly or it does not sell. He should work out its value every year at the current market price, then if he has money he should pay its zakaah from the money that he has, and if he does not have any money he should work out the zakaah for each year, and when he sells it he should pay the zakaah for the past years. End quote from Liqa’ al-Baab al-Shahri (15/12).
And Allaah knows best.
Islam Q&A
http://islamqa.info/en/105334
SalmanKhan replied on Tuesday, May 5, 2015 09:22 AM
JazakAllah for this comprehensive post |
HHH replied on Tuesday, May 5, 2015 09:40 AM
http://www.crescentsofbrisbane.org/Files/Iqbal%20Lambat%20Ramadan/Week%204/8.%20Property.pdf
Property can be purchased to hold for the long term and realise rental income or it can be bought for speculative purposes to resell as soon as an appropriate gain can be realised.
1. Land
Dr Yusuf Al-Qaradawi, Dean of the University of Qatar, in responding to a question on whether land is subject to zakat, statesi: "The purchased land can be categorised as one of two types. The first type is purchased for resale after a period for profit. This type of purchase is a trade transaction and the land in this case is considered a commercial commodity. The land should be appraised annually to determine its value and then Zakah is paid at a rate of 2.5% of that value. This is the opinion of the majority of scholars. Only the followers of Imam Malik have a different opinion. They hold that the land is not subject to Zakah unless it is actually sold. The Zakah is 2.5% of the amount a person receives when the property is sold. The majority of scholars, however, consider this land as wealth and it is then subject to Zakah. This opinion is the most appropriate.
Land held for resale or being held to be developed is subject to zakat at the market value of the land.
"The second type is a land that is purchased to build on and not for resale. In this case, it is not subject to Zakah unless the owner has actually built on the land and rents out the property. Then, he should pay Zakah on the revenue derived from the rent." |
Habib replied on Tuesday, May 5, 2015 11:54 AM
what about Agri Land it Gives you crop and gain value as well, mY agri Land Gained 4 Times value in 12 years |
Ashfaq Khan replied on Tuesday, May 5, 2015 12:28 PM
Zakah on agricultural land.
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:
is there zakat on agricultural land, if yes then how much? also zakat on industrial productions, and on saliried persons?
(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 agricultural land
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.
Your Question: …is there zakat on agricultural land, if yes then how much?
Agricultural land is absolutely exempt from ‘zakah’ in Islam; thus even if one owns agricultural land worth millions of dollars, one is not liable to pay ‘zakah’ annually on that agricultural land itself.
The ‘zakah’ on agricultural land is determined from its produce:
If the land is irrigated naturally through rain the ‘zakah’ would be 10% of the produce of the land.
If the land is irrigated artificially through tube wells, tributaries, etc…the ‘zakah’ would be 5% of the produce of that land.
Your Question: …..also zakat on industrial productions
‘Zakah’ is not determined on the annual industrial production, but rather on the net value of the industrial business itself.
Your Question: …..and on saliried persons?
‘Zakah’ is not determined on the monthly/annual salary of the person, but rather on his net excess assets which he accumulates after paying all his expenses.
Thus if the annual salary of the person is 10,000 and his total annual expenses are 8,000; thus assuming the person has no other assets or savings upon which ‘zakah’ is due, he will be liable to pay ‘zakah’ on his savings of 2,000 at the rate of 2.50%.
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
http://www.islamhelpline.net/node/6949 |
