I own a property which I had brought three years back and on which construction is going on. So in that case how should I calculate the zakat on it? Should I calculate the zakat on the value of appreciation from the last years value or on the full market value up to date?
In the name of Allah, the most Beneficent, the most Merciful.
If a person brought a property there are three possibilities.
- If he brought it for re-sale then he has to give zakat on the market value of the property every year.
- If he brought it for his own personal use, then there is no zakat.
- If he brought it and at the time of buying it, he made no intention regarding it, there will be no zakat. However, when he sells the property the money acquired should be added onto his other zakatable assets and zakat given thereupon. (Aapke Masail p.371 v.3)
When calculating zakat on the property (i.e. in the first scenario), zakat must be calculated according to the current market value of the property each year and not on the purchase price. (Ahsanul Fatawa p.299 v.4)
Only Allah Knows Best
Mohammed Tosir Miah
Darul Ifta Birmingham.