Zakah on money invested in flats' construction

16-10-2005 | IslamWeb

Question:

I am a builder 7 months before invested Rs. 35 Lakhs on flats construction. I will get the returns after selling the flats in a year or two (after completion).
Do I have to pay Zakaah on above investment or I have to get all returns then pay? Please inform me. Every year I pay Zakaah in Ramadhaan only.

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Answer:

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.

 

If the flats in which you invested your money are for the purpose of sale, then you have to pay Zakat on them as they are tradable items. So when a complete lunar year elapses on the money you invested if it reached the minimum amount liable for Zakat by itself or with other money or tradable items added to it, then it is an obligation to pay 2.5% Zakat on them. The estate should be valued according to price market when the Zakat becomes due. However, if you are unable to pay Zakat for these flats when a complete lunar year elapses because you do not have enough cash money, then in this case it is permissible for you to postpone the payment of Zakat until you will have enough cash money or until you sell the estate. Thus, you will have to pay Zakat for all the previous years for which you did not pay Zakat. The Zakat has to be calculated according to the value of the estate for the year in which you did not pay Zakat.

Allaah Knows best.