Is A Buy To Let Property With Plans To Sell Upon Favourable Market Conditions Zakatable?
The question, as received
Is a property purchased for personal use or a buy to let but with a plan to surely sell this in future when market conditions are right Zakatable?
The answer
The property is not Zakatable at present. The property will not be Zakatable even when put on the market. Upon the sale taking place, the net income on one’s Zakat anniversary will be Zakatable.
In short: the property is not zakatable; the sale proceeds held on the Zakat anniversary are.
Fiqh basis
The property at present is not Māl Nāmī as it is not for sale (Tijārah). A conditional intention is not sufficient to activate an asset as Zakatable1. Therefore, a property bought as a buy to let with the intention to sell one day in the future will not be Zakatable at present.
And Allah knows best.
Mufti Faraz Adam
References
The Answer is correct.
Checked and approved by Mufti Mohammed Zubair Butt
1وَلَوْ اشْتَرَى عَبْدًا لِلْخِدْمَةِ نَاوِيًا بَيْعَهُ إنْ وَجَدَ رِبْحًا لَا زَكَاةَ فِيهِ(البحر الرائق ج2ص246ط أيج أيم سعيد)
Based on the Hanafi school and on the question as it was asked. Another mufti may reach a different conclusion. Read the disclaimer.