Question:
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.
The Answer:
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.[1] 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.[2] 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.[3] 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[4]. 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
www.darulfiqh.com
The answer is correct.
Checked and approved by
Mufti Mohammed Zubair Butt
DISCLAIMER:
The views and opinions expressed in this answer belong only to the author and do not in any way represent or reflect the views of any institutions to which he may be affiliated.
Arguments and ideas propounded in this answer are based on the juristic interpretations and reasoning of the author. Given that contemporary issues and interpretations of contemporary issues are subjective in nature, another Mufti may reach different conclusions to the one expressed by the author. Whilst every effort has been taken to ensure total accuracy and soundness from a Shari’ah perspective, the author is open to any correction or juristic guidance. On the event of any juristic shortcomings, the author will retract any or all of the conclusions expressed within this answer.
The Shari’ah ruling given herein is based specifically on the scenario in question. The author bears no responsibility towards any party that acts or does not act on this answer and is exempted from any and all forms of loss or damage. This answer may not be used as evidence in any court of law without prior written consent from the author. Consideration is only given and is restricted to the specific links provided, the author does not endorse nor approve of any other content the website may contain.