Fatwa ID: 06296

Answered by: Maulana Burhaan Rahman

Question:

If you remortgage a property and you have that cash for investments/work in progress do you have to pay zakat on it?

In the name of Allah, the Most Gracious, the Most Merciful

Answer:

Whatever money or cash you have in possession you must pay zakaah on it. Even though the money you possess goes into work and investments, as long as it reaches the nisab (minimum threshold) you must pay 2.5% of it.

In Rad Al-Muhtar it mentions:

(فَتَجِبُ) زَكَاتُهَا إذَا تَمَّ نِصَابًا وَحَالَ الْحَوْلُ، لَكِنْ لَا فَوْرًا بَلْ (عِنْدَ قَبْضِ أَرْبَعِينَ دِرْهَمًا مِنْ الدَّيْنِ)

(It’s mandatory) to give zakah if the money he accumulates throughout the year reaches the minimum threshold, but he doesn’t need to give it immediately.

So this means however your investments work whether:

• The full money is invested – you get the yield of it soon and 2.5% is to be paid from the yield.
• Or invest part of the money – the non-invested money if there’s enough from that, can be used for zakaah.

Only Allah knows best.

Written by Maulana Burhaan Rahman

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham