Is Zakah Due on Residential Properties Owned for Personal Use or Occupied by Family Members?
Question: I own four properties. One is in my home country, which I stay in whenever I travel there on vacation. Another is occupied by my elderly mother and my unemployed brother, who has two children. A third property is occupied by my sister. Am I required to pay zakah every year on these properties? If so, how much would it be, considering that I am currently unemployed and do not have any money in my bank account that has remained for a full lunar year? Thank you for your guidance and response.
Summary:
- If these properties are designated for personal residence, for housing one's mother, children, or relatives, or for personal use, and are not intended for sale as trade merchandise, then there is no zakah due on the properties themselves, by the consensus of the scholars. - If the properties are rented out, zakah is not due on the value of the property itself. Rather, zakah is due on the rental income if it reaches the nisab (minimum zakatable amount) and remains in one's possession for one lunar year. - However, if the properties were acquired with the intention of selling them as part of a real estate business or trade, then they are considered trade merchandise (ʿurud al-tijarah), and zakah is due each year on their current market value once the total value reaches the nisab.
Answer:
Firstly: Properties Intended for Personal Use Are Not Subject to Zakah
The basic principle is that property acquired for personal residence or personal use is not subject to zakah.
From the Sunnah:
- Among the evidences is the narration of Abu Hurayrah (may Allah be pleased with him), Narrated by al-Bukhari and Muslim:he reported that the Prophet ﷺ said:
"A Muslim is not required to pay Zakah on his slave or his horse."
The scholars inferred from this hadith that possessions acquired for personal ownership, use, and benefit are not subject to zakah.
From the Scholars:
- Al-Wazir Ibn Hubayrah (may Allah have mercy on him) said:
"The scholars unanimously agreed that there is no zakah on residential homes, everyday clothing, household furnishings, riding or service animals, servant slaves, or weapons kept for personal use."
- Ibn Qudamah (may Allah have mercy on him) said in al-Mughni:
"There is no zakah on residential homes, ordinary clothing, or household furnishings, because they are acquired for personal use rather than growth or trade."
- Imam al-Nawawi (may Allah have mercy on him) said:
"...Likewise, zakah is not obligatory on other animals such as horses, mules, and donkeys, due to the narration of Abu Hurayrah (may Allah be pleased with him), that the Prophet ﷺ said: 'A Muslim is not required to pay charity on his slave or his horse.' This is because they are kept for adornment or personal use, not for growth or investment. Therefore, they are analogous to real estate and household furnishings, upon which zakah is not obligatory."
Secondly: Rental Properties If a property is rented out: There is no zakah on the value of the property itself. Rather, zakah is due on the rental income after it has been received, provided that it reaches the nisab and remains in the owner's possession for one complete lunar year.
From the Scholars:
- Shaykh bin Baz (may Allah have mercy on him) said:
"If a property is intended for rental, there is no zakah on the property itself. Rather, zakah is due only on its rental income. For example, if the property is worth five hundred thousand but is intended for rent rather than sale, then no zakah is due on its value. However, if its rental income amounts to fifty thousand, for example, then zakah is due on that amount once a full lunar year has passed..."
- Shaykh Ibn ʿUthaymīn (may Allah have mercy on him) was asked about a house prepared for rental, and he replied:
"A house prepared for rental is not subject to zakah regardless of how valuable it is. Rather, zakah is due on its rental income..."
He then explained that if the rental income remains in one's possession until a full lunar year has passed, zakah becomes obligatory upon it. Otherwise, no zakah is due.
Thirdly: Properties Intended for Sale If the owner acquired the properties with the intention of selling them as part of a business or trade, then they fall under the ruling of trade merchandise. The evidence for this is the general statement of Allah, the Exalted:
From the Qur'an:
- [Surah al-Baqarah 2:267]
"O you who believe! Spend from the good things that you have earned..."
The majority of the jurists cited this verse as evidence for the obligation of zakah on trade merchandise.
From the Sunnah:
- Abu Dawud narrated from Samurah ibn Jundub (may Allah be pleased with him), who said:
"The Messenger of Allah ﷺ used to command us to give charity from whatever we prepared for sale."
This hadith was graded weak by Shaykh al-Albani (may Allah have mercy on him).
From the Scholars:
- Ibn Qudamah (may Allah have mercy on him) said:
"Trade goods are evaluated once a full lunar year has passed, and zakah is paid on them. Whoever owns trade merchandise that reaches the nisab and remains in his possession for one lunar year should assess its market value at the end of the year and pay one-quarter of one-tenth (2.5%) of its value as zakah."
Applying the Ruling to This Question Based on the details mentioned by the questioner: - The property in which he stays when visiting his home country: No zakah is due on it. - The property occupied by his elderly mother and his brother: No zakah is due on it. - The property occupied by his sister: No zakah is due on it. This is so long as these properties are not intended for sale as trade merchandise. Therefore, if the questioner does not possess cash or other zakatable wealth that has reached the nisab and remained in his possession for one complete lunar year, then no zakah is due upon him. However, if any of these properties are rented out, then the rental income itself should be considered. If the remaining rental income reaches the nisab and a full lunar year passes over it, then zakah is due at the rate of one-quarter of one-tenth (2.5%). Final Answer: If the properties mentioned are designated for personal residence or for housing one's mother or relatives, and are not intended for sale, then there is no zakah due on their value, by the consensus of the scholars, even if they are worth millions. Rather, zakah is only due on cash holdings or rental income that reaches the nisab and remains in one's possession for one complete lunar year, or on properties that are acquired for the purpose of trade and resale.
And Allah knows best.
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