Zakat on Land
Posted: 20 Muharram 1432, 26 December 2010
Q. I have purchased a plot for investment purposes. Do I need to pay zakat on it? So far, I have received the allotment letter for the plot but not the possession letter. There are some formalities and payments that need to be done, which will be completed next year.
A.Zakat should be paid on the market value of the plot if it was purchased for resale. If the investment referred to was in order to earn a rental income therefrom, then zakat is not payable on the value of the property.
And Allah Ta'ala Knows Best