Zakat on house sold for building new home and business

Our father died leaving a large house. We intend to sell off the house and use the money as follows:

1. For buying  land to build new houses on it for living.
2. For buying land and later sell it and use the money generated in building new houses for living.
3. For treatment and care of our sister and mother.
4. Investment  in some business.

Do we have to pay zakat on father’s house? If yes, will the zakat be payable on part or whole of the cost of the house and will it be calculated from time of father’s death or after we are able to sell it?

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

At the outset we wish to point out that after an individual has passed away his wealth should be distributed among his inheritors. No inheritor has the right to usurp or utilize another inheritor’s portion. However, if all the inheritors have agreed that the wealth be used for one purpose[1] or business then it will be permissible not to distribute it. Therefore, we advise that you acquire explicit permission form each and every inheritor, so that no one’s rights are being infringed.

If you have ascertained that each and every inheritor has acquiesced in having their portion invested in the ventures in reference, then each inheritor will still own a share in proportion to his inheritance, as it is still his/her wealth. Therefore, as each individual will still be owner of his portion, the standard laws of Zakat will apply i.e. each person’s portion in the business venture will be included in his own wealth; therefore, each inheritor will pay Zakat individually and according to his own wealth.[2]

And Allah Ta’āla Knows Best

Saleem Ibn Sajawal Khan

Bradford, UK

Student Darul Iftaa

Checked and Approved by,
Mufti Ebrahim Desai.