Answered by Shaykh Abdul-Rahim Reasat
Question: Assalamu alaykum
I have a building which I rent out. The money earned from it is spent on financing my Islamic school (completing the structure, paying staff, and for other materials). I am in debt due to this.
Is zakat due on the structure?
Answer: Wa ‘alaykum assalam wa rahmatullah wa barakatuh.
I pray you are well.
No, it seems like you do not owe any zakat. There would be no zakat on the building unless it was purchased with the intention of reselling it.
As for the rental income, if it is used up paying for the things you mentioned then no zakat would be due on it either. Zakat would only be due if you were over the nisab amount at one point, then a lunar year passes without you losing anything surplus to your essential costs, and then you were over the nisab amount at the end of that year. You would also deduct your debt from the final amount.
If you were over the nisab amount after all this then you’d say 2.5% of what you had in zakat. [Mahbubi, Sharh al Wiqaya]
May Allah reward you abundantly for your efforts to facilitate the teaching of the din. You’ll find it to be one of the deeds which doesn’t end at your death. Its reward goes on and on. [Muslim]
[Shaykh] Abdul-Rahim Reasat