Explaining Islam in Light of the Qur'an and the Sunnah of the Prophet Muhammad (ﷺ‎)

Zakat on Residental Plots

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Question

I am leading retired life for the last two years. Presently I have neither a business nor any income. Up till this month I have been paying Zakat @ 2.5% of my total assets. Since I now have no money I am finding it difficult to pay Zakat particular lily against six residential plots that I had purchased as an investment few years ago. These plots are yielding no profit. However, there market prices keep going up & down, mostly up wards. Zakat @ 2.5% of their market price becomes a huge amount. Previously I have been paying this huge amount as Zakat. Now I find it difficult. Could you please guide me if I am still obliged to give Zakat for these plots.

I am however, paying zakat for my following assets:

  • On the yearly rent that I earn from the two houses rented out by me @ 2.5%
  • Jewelry owned by my wife @ 2.5%
  • Two cars in my use @ 2.5% of their market value.
  • Little bank bank balance @ 2.5%

With best regards

Answer

If the residential plots are idle, meaning, they are not being used and are not generating money then this is cosnidered weath and an annual 2.5% Zakah is due (otherwise, you only need to pay 10% of the revenue you make from the business that these plots are used for and you do not need to pay Zakah for their own value).

If you cannot pay the above Zakah, you are not religiously obliged to sell anything to pay it. However, it remains as your debt to those who are eligible to receive Zakah. Like any other debt, it will be your resonsibility to pay it as soon as possible. If this is not possible in your life time then it is a debt that should be mentioned in your will and your trustees need to pay it from what you will leave behind.
As for your other items of Zakah, please see the following:
  • On the yearly rent that I earn from the two houses rented out by me.  @ 2.5%
This actually needs to be 10% in our view as it is considered as production of capital only, however no Zakah on the value of these houses is required.
  • Jewelry owned by my wife.  @ 2.5%
Correct, but if it is in regular use then no Zakah is due. Also in principle it is not your duty to pay this for your wife.
  • Two cars in my use. @ 2.5% of their market value.
Again, if you are using them then you do not need to pay Zakah for them.
  • Little bank bank balance @ 2.5%

Correct.

Please note that Zakah is the tax that you pay to the state and religiously it is the only tax that you are supposed to pay. Therefore if you are already paying any tax to the state you may deduct that amount from the Zakah that you have calculated.

Abdullah Rahim