Fatwa ID: 02267

Answered by Molana Eunus Ali

Question:

Assalaamu alaikum,

I have purchased an off-plan property and have set aside an amount which I will have to pay to the developer over the next two years.
Is zakat payable on the amount that I have set aside? Or is this considered a debt which can be offset for the purpose of my zakat calculation.

Please advise.
JazakAllahu khair
Rafiq

Answer:

According to the preferred opinion in the Hanafi school a long-term debt will not prevent one from paying Zakah.[1]

Therefore only that amount which has been set aside for the developers for that year should be deducted from the savings and not the total amount payable to the developers. Zakat should then be paid on the remaining savings if they are above the nisab amount.[2]

Please refer to the link below:

http://daruliftabirmingham.co.uk/zakat-on-short-and-long-term-loans/

Only Allah knows best

Written by Molana Eunus Ali

Darul Ifta Birmingham.

Checked and approved by Mufti Mohammed Tosir Miah