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Zakaat on Property for Resale

Answered according to Hanafi Fiqh by Askmufti.co.za

Q: Two months ago I invested an amount to buy a property jointly with an intention to sell it off when the price increases. Should I pay zakat for it as I didn’t sell it yet?

A: The land you bought is with the intention of reselling, thus this is like stock in-trade, so Zakaat will be compulsory on it when your Zakaat date is due. You said the property was bought jointly. If it means you went into partnership with someone in buying this property then you need to pay Zakaat on only your share of the property.

Remember that for Zakaat the property must be valued according to current market value. You will not pay Zakaat on the amount that you paid for the property.

This answer was collected from AskMufti.co.za, which is operated under the supervision of Mufti Siraj Desai of Darul-Uloom Abubakr, South Africa.

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