What do the scholars of the Dīn and muftīs of the Sacred Law state regarding the following issue: Some land was purchased in order to sell but it is not known at this current moment in time as to when it will sell, so what is the ruling of Zakāh for it; and the second matter is that if some land was purchased in order to sell having built a flat, etc. on it, then how will Zakāh be due on it because sometimes it is just left empty for many years, and after having made offices or flats on it and then selling it, some percentage of the land actually still remains in the owner’s possession, so will there be Zakāh due on this a second time?
Questioner: Muhammad Aamir from Karachi, Pakistan
بسم اللہ الرحمن الرحیم
الجواب بعون الملک الوھاب اللھم ھدایۃ الحق والصواب
The land that has been purchased to sell is business wealth, hence Zakāh is Fard for it, therefore Zakāh is to be calculated in accordance to its current market value. As for the second case, if one has purchased some land having made a plaza, flats, etc. this is also included business wealth as it was actually purchased with the intention of selling as well, even if a certain percentage still remains in one’s ownership after having sold the flats, etc.
There can be three cases to this:
1 – The purchased land is empty
2 – There is ongoing construction work for the flats, etc.
3 – The building work is complete
Hence, the Zakāh of the market value of whichever case is found is calculated upon the completion of the [Zakāh] year. The purchase or selling cost will not be considered; rather, it is actually the market value.
It is stated in Qudūrī,
“الزَّكَاةُ وَاجِبَةٌ فِي عُرُوضِ التِّجَارَةِ كَائِنَةً مَا كَانَتْ”
[Mukhtasar Qudūrī, p. 85]
And it is stated in Fatāwā Ridawiyyah, ‘Zakāh is not on the cost of business wealth nor on the expenditure, but rather Zakāh will be due on the profit and the current market value of any business wealth.’
[Fatāwā Ridawiyyah, vol. 10, p. 158]
واللہ تعالی اعلم ورسولہ اعلم صلی اللہ علیہ وآلہ وسلم
کتبہ ابو الحسن محمد قاسم ضیاء قادری
Answered by Mufti Qasim Zia al-Qadri
Translated by Haider Ali Madani
Read the original Urdu answer here: [Q-ID0845] Do I have to pay Zakah on property I bought to resell?