What do the scholars of the Din and muftis of the Sacred Law state regarding the following issue: If someone took a loan out from the bank, in other words, they have a taken out a mortgage, then in this case, will there be Zakāh due upon this. As you are already aware, this debt is substantially large, and some scholars say that the relevant month’s mortgage payment in the month be subtracted in the month one is paying Zakāh and that it is Fard to pay Zakāh on the remaining amount. Whereas, some say that the full year’s repayments should be subtracted and Zakāh be given on the remaining amount. Which of these is correct? We are very confused regarding this; a well-researched answer is needed. May Allāh Almighty reward you.
Questioner: Zahid from UK
بسم اللہ الرحمن الرحیم
الجواب بعون الملک الوھاب اللھم ھدایۃ الحق والصواب
The correct opinion regarding this is that the person indebted is to subtract the full mortgage amount from the total wealth which Zakāh is applicable to, and then pay Zakāh on the remaining, provided that the remaining wealth reaches the threshold. This is because this loan, be it advanced repayments or delayed, has to be repaid within a certain timeframe (approximately 25 years). Yes, if nothing remains after subtracting the mortgage from the total amount, then Zakāh will not be wājib, but in this case, it is still better to give Zakāh due to there being a difference of opinion among the scholars as to whether Zakāh is applicable to deferred debts or not. Though the correct opinion is that there is no Zakāh upon any deferred debt which is demanded via a person, and the difference of opinion is in regards to a customarily deferred debt which isn’t usually demanded, such as dowry.
Whereas, a bank’s demands are very extreme, and a bank loan is not such that it can be compared to dowry because usually dowry is not demanded for, whereas mortgage repayments are like a knife in the heart; the loan itself is demanded for, and the demands are so extreme that if the mortgage repayments are not met, then the actual house is repossessed in full – whatever payments were made prior have now actually gone to waste, and the bank itself has the legal power & authority to do so. In addition, a mortgage is considered as a debt by people, in the sense that a person may delay his food [i.e. pay later, etc], but he is unable to delay a mortgage repayment, thus a person is to minus the complete loaned amount he took out to buy the house from the total amount of wealth, and it will be Fard to pay Zakāh on the remaining wealth.
The statements of several Hanafī books are witness to this.
Just as it is stated in al-Hidāyah,
“وَمَنْ كَانَ عَلَيْهِ دَيْنٌ يُحِيطُ بِمَالِهِ فَلَا زَكَاةَ عَلَيْهِ”
“An indebted person whose debt totally encompasses him [i.e. his total wealth], so there is no Zakāh [due i.e. Fard] upon him.”
Regarding this, it is stated in Sharh al-‘Ināyah that,
“وَلَهُ مُطَالِبٌ مِنْ جِهَةِ الْعِبَادِ سَوَاءٌ كَانَ لِلَّهِ كَالزَّكَاةِ أَوْ لِلْعِبَادِ كَالْقَرْضِ ۔۔۔ وَسَوَاءٌ كَانَ حَالًا أَوْ مُؤَجَّلًا”
“And if a person demands the debt (loan), then it is equal whether that is a debt of Allāh Almighty, such as Zakāh, or a personal debt, such as a loan. It is also equal whether it is such a debt which is required to be given upfront or such that it must be repaid within a certain window.”
[al-Hidāyah ma’ al-‘Ināyah, vol 2, pg 160]
Moreover, a mortgage is actually such that it is a deferred loan and is demanded via a person.
It is stated as so in Tabyīn al-Haqā’iq sharh Kanz al-Daqā’iq,
“وَلَا فَرْقَ فِي الدَّيْنِ بَيْنَ الْمُؤَجَّلِ وَالْحَالِّ وَالْمُرَادُ بِالدَّيْنِ دَيْنٌ لَهُ مُطَالِبٌ مِنْ جِهَةِ الْعِبَادِ”
[Tabyīn al-Haqā’iq sharh Kanz al-Daqā’iq, vol 1, pg 254]
Likewise, in al-Bahr al-Rā’iq,
“أَطْلَقَهُ فَشَمِلَ الْحَالَّ وَالْمُؤَجَّلَ”
“Debt has been mentioned without any conditions or restrictions; thus, it includes debt which is required to be paid beforehand as well as the deferred kind.”
[al-Bahr al-Rā’iq, vol 2, pg 219]
“قَالَ أَصْحَابُنَا رَحِمَهُمْ اللَّهُ تَعَالَى كُلُّ دَيْنٍ لَهُ مُطَالِبٌ مِنْ جِهَةِ الْعِبَادِ يَمْنَعُ وُجُوبَ الزَّكَاةِ سَوَاءٌ كَانَ الدَّيْنُ لِلْعِبَادِ كَالْقَرْضِ ۔۔۔ وَهُوَ حَالٌّ أَوْ مُؤَجَّلٌ”
“Our scholars, may Allāh Almighty have mercy upon them, have stated that Zakāh will not be applicable to any debt which is demanded via a person; be it a person’s debt such as a loan, and be this via advanced repayments or delayed.”
[al-Fatāwā al-Hindiyyah, vol 1, ch 1, pg 173]
In fact, Fatāwā Hindiyyah mentions Zakāh not being applicable to dowry, and this has been regarded as the verified opinion & the apparent stance of such school of thought. Just as it is stated as so,
“وَكَذَلِكَ الْمَهْرُ يَمْنَعَ مُؤَجَّلًا كَانَ أَوْ مُعَجَّلًا؛ لِأَنَّهُ مُطَالَبٌ بِهِ كَذَا فِي مُحِيطِ السَّرَخْسِيِّ. وَهُوَ الصَّحِيحُ عَلَى ظَاهِرِ الْمَذْهَبِ”
[al-Fatāwā al-Hindiyyah, vol 1, ch 1, pg 173]
واللہ تعالی اعلم ورسولہ اعلم صلی اللہ علیہ وآلہ وسلم
کتبہ ابو الحسن محمد قاسم ضیاء قادری
Answered by Mufti Qasim Zia al-Qadiri
Translated by Haider Ali
Read the original Urdu answer here: [Q-ID0683] Do I have to give Zakah if I have a mortgage debt?