Is a property purchased to resell and thereafter leased for short-term but still on the market for sale Zakatable?
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
A property purchased to resell but then leased in the interim whilst maintaining the intention to resell is Zakatable.
The Fiqh (jurisprudence of the answer):
Zakat is payable on what is termed Māl Nāmi (growing wealth), whether the growth is actual, such as through reproduction or sale (Tijārah), or is potential by virtue of having the ability to effect increase through possession. Gold, silver and their substitute currency are naturally subject to growth and so require no intention (niyyah) whilst all other wealth [excluding animals pastured for their milk and offspring], such as property, requires intention to sell for it to become Māl Nāmī. This intention of sale must be made at the time of a commutative acquisition. Then, as long as the intention for sale remains, the property remains Māl Nāmi and continues to be Zakatable. It is possible to add a further intention whilst also maintaining the intention of sale. The Fuqahā’ give an example wherein an item acquired for sale is then intended and used for personal use for a number of years but the intention of sale also remains. The Fuqahā’ state that, as long as he continues with his intention of sale, the item will be Zakatable. The reason for this is that, as long as the intention for sale remains, the item remains Māl Nāmi, which is what makes it liable for Zakat.
Therefore, any property acquired through a commutative contract to resell and thereafter leased for a period whilst maintaining the intention of resale remains Māl Nāmī and continues to be liable for Zakat.
However, if the intention to sell is cancelled, the property will no longer be liable to Zakat as it is no longer Māl Nāmī. Imām al-‘Aynī rahimahullah states that intention alone is not sufficient to effect a change in ruling. It must be accompanied by an action. Trade requires a positive action whilst non-trade does not require a positive action. Rather, a negative action such as ceasing trade (ترك التجارة) is also sufficient. An intention accompanied by action, positive or negative, is sufficient to remove it from being for trade. Therefore, if the intention to sell is cancelled and changes instead to personal use or lease, the property is no longer liable to Zakat.
And Allah Ta’ālā Alone Knows Best
Mufti Faraz Adam al-Mahmudi,
The answer is correct.
Checked and approved by
Mufti Mohammed Zubair Butt
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