Is there zakah on a house rented out to a tenant?

I have two questions pertaining to paying zakat on Property.

Question #1: I own a shop which is rented out. This rent is the sole earning of my family. How do i pay zakat? Do i pay zakat on the market value of the shop? or do i pay zakat on the value of the rent received?

Question #2: I have purchased a property for the sole reason of renting it out when it is developed. At the moment the property is under construction and i am paying quarterly installments and the property is not in my possession. How do i Pay Zakat? Do i pay Zakat on the market value of the property or do i pay zakat when i have possession of the property? Should the Zakat be on the market value of the property or on the rental income i will generate??

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

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

1) In principle, there is no zakah on a personal property which is not acquired specifically for reselling.^[1] In the inquired situation, zakah will be due on the rental income.^[2] However, this is only if one possesses the amount of nisaab (including the rentals) and his liabilities/debts do not exceed his assets.^[3]

2) There is no zakah on the property under construction.^[4] Zakah will only become binding after one earns rental income from the property with the proviso as explained in the answer above.^[5]

And Allah Ta’āla Knows Best

AbdulMannan Nizami

Student Darul Iftaa
Chicago, IL, USA

Checked and Approved by,
Mufti Ebrahim Desai.

www.daruliftaa.net