I have bought a land in the year 2001 for investment purpose. My intention was to sell it and utilize its money for the purpose of building our house whenever we plan to have one since we don’t have our own house yet and are still renting it from outside. Later on, I bought a land and am now building my house on it without selling out the previous land. Now, I have changed my plan to sell that plot and have decided to keep it until, either I decide to sell it or do some sort of business on it. I want to know, (1) Do I have to pay zakat on this land that I bought with the intention to sell and have not sold yet. (2) If so, since when? (3) At what rate per square unit? Kindly advise.
Answer:
(Fatwa: 828/607/L=1431)
If you had purchased that land with the intention of business, the Zakah of previous years shall be wajib on this land. However, from the time you changed your intention no zakah shall be wajib on it. Before changing intention the zakah of previous years shall be paid in a way that on the ending of each year whatever price the land had will be assessed and its zakah shall be paid. For the next year, by deducting the zakah amount of first year, the zakah shall be paid. It is necessary to pay 2.5% (fortieth part) as zakah.
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband