Zakat on Land Purchased for Investment or Personal Use: How Intent Affects Zakat Obligation
| Question |
| Salaam alaikum warahmatuLlah wabarakaatu. I would like to know how to pay zakah in this case : he bought 2 units of land back home initially for investment but he hasn’t decided if he will build them as a family house to live in it or sell them for profit after 5-20 years? Scenario 2: what if he chooses to sell one now and keep the other to build as his house, or chooses to sell the second unit later as well. How should he pay zakat in these cases? |
Zakat Ruling Based on Intention
1. Initial Intention is Investment
- If both units were bought with the clear intention to resell (i.e., as an investment), then zakat is due on both.
2. If the Intention Becomes Unclear or Changes
- If the owner becomes unsure about his intention (e.g., whether to sell or build a home), then the default ruling follows the original intention — which was investment.
- Therefore, zakat continues to be due on the land until a clear decision is made.
3. When One Unit is Clearly Designated as Personal Use
- If he clearly decides that one unit will be for personal residence, and the other remains for sale or investment:
- Zakat is due only on the investment unit.
- No zakat is due on the personal-use unit.
4. If He Later Decides to Sell the Personal-Use Unit
- The obligation to pay zakat on the second (previously personal) unit begins once the intention to sell is firmly made.