Fatwa ID: 09385
Answered by Muftiyah Maryam Badshah
Question:
Assalamu Alaikum wa Rahmatullah,
I hope you are well.
I would like to ask a question regarding the obligation of zakat on funds that are intended for property purchase.
I have signed a contract to purchase an under-construction property. I have paid a deposit, and the remaining amount is to be paid in instalments over the next two years as per the construction/payment schedule. At the time my zakat becomes due, I still have majority of that money in my possession, allocated for future installments.
My question is: Do I need to pay zakat on the remaining money that is still in my possession but has been set aside for the future payments of the property after the contract is already signed?
We signed the contract for 1.2 M and paid around 300 k at the time of contract. Remaining amount has to be paid according to the progress of construction.
Will the remaining amount be considered as a binding debt to be paid or it is legally ours on which we have to pay zakaat?
I would appreciate your guidance on this matter.
JazakAllah khair.
In the name of Allah, the Most Gracious, the Most Merciful
Answer:
After reaching the nisab threshold, a person is required to give zakah on 2.5% of their zakatable assets at the end of each year. Savings intended for the payment of a long-term contract are still considered one’s own property and so remain zakatable assets. Since your payments are dependent on the construction progress and are part of a long-term contract, you would only deduct from your total zakatable assets the most immediate installment currently due to the construction company that month when giving zakah. The rest of your assets set aside for these payments will still be liable for zakat.[1]
Only Allah ﷻ knows best.
Written by Muftiyah Maryam Badshah
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham
References:
[1]
الْبَابُ الثَّالِثُ فِي زَكَاةِ الذَّهَبِ وَالْفِضَّةِ وَالْعُرُوضِ) ، وَفِيهِ فَصْلَانِ (الْفَصْلُ الْأَوَّلُ فِي زَكَاةِ الذَّهَبِ وَالْفِضَّةِ)
تَجِبُ فِي كُلِّ مِائَتَيْ دِرْهَمٍ خَمْسَةُ دَرَاهِمَ، وَفِي كُلِّ عِشْرِينَ مِثْقَالِ ذَهَبٍ نِصْفُ مِثْقَالٍ مَضْرُوبًا كَانَ أَوْ لَمْ يَكُنْ مَصُوغًا أَوْ غَيْرَ مَصُوغٍ حُلِيًّا كَانَ لِلرِّجَالِ أَوْ لِلنِّسَاءِ تِبْرًا كَانَ أَوْ سَبِيكَةً…
Al-Fatāwa al-Hindiyyah (Vol.1, pg.178-80, Dār Al-Fiqr)
قَوْلُهُ بِقَدْرِ دَيْنِهِ) مُتَعَلِّقٌ بِقَوْلِهِ فَلَا زَكَاةَ (قَوْلُهُ وَعُرُوضُ الدَّيْنِ) أَيْ الْمُسْتَغْرَقِ فِي أَثْنَاءِ الْحَوْلِ وَمِثْلُهُ الْمُنْقِصُ لِلنِّصَابِ وَلَمْ يَتِمَّ آخِرَ الْحَوْلِ، وَأَمَّا الْحَادِثُ بَعْدَ الْحَوْلِ فَلَا يُعْتَبَرُ اتِّفَاقًا
Al-Fatāwa al-Hindiyyah (Vol.1, pg.263, Dār Al-Fiqr)