Fatwa ID: 02044
Answered by Mufti Mohammed Tosir Miah
I purchased a plot of land with intention (NIYAT) that I will sell it after passage of time when the rate of the plot will be increased. Will I have to pay the ZAKAT on that property
If a person brought a property or a plot of land there are three possibilities.
- If he brought it for re-sale then he has to give zakat on the market value of the property or the plot of land every year.
- If he brought it for his own personal use, then there is no zakat.
- If he brought it and at the time of buying it, he made no intention regarding it, there will be no zakat. However, when he sells the property the money acquired should be added onto his other zakatable assets and zakat given thereupon. (Aapke Masail p.371 v.3)
When calculating zakat on the property or plot of land (i.e. in the first scenario), zakat must be calculated according to the current market value of the property each year and not on the purchase price. (Ahsanul Fatawa p.299 v.4)
Regarding your question, when buying the plot of land, if you had the intention of resale then you will have to give zakat on the current market value of the land. However, if your intention was to buy it first and use it then sell it on later then zakat would be given on the money acquired if it reaches the value of Nisab.
Only Allah Knows Best
Mohammed Tosir Miah
Darul Ifta Birmingham.