❖ Question:
A family has moved from Pakistan to England and wishes to purchase a house there on installments. After the price is fixed, the property is obtained on installments. However, if the installments are not completed within two years, then as per government policy, the rate is increased, and the following two years' installments must be paid according to this new rate. Is such a transaction permissible in light of Shariah?
❖ Answer by: Fadhilat al-‘Alim Hafiz Khizr Hayat (حفظہ اللہ)
There are two opinions regarding buying and selling on installments. However, according to our scholars and elders, purchasing on installments is permissible with two essential conditions:
① The price must be fixed at the time of sale, meaning there should be no ambiguity.
② There must be no penalty or additional charges imposed for delay in installment payments.
If these two conditions are fulfilled, then purchasing on installments is permissible. But if these conditions are violated, then the transaction becomes impermissible.
In the given case, the increase in rate after two years is a form of interest (Riba). Any increase in payment due to delay in installments or for any reason is considered interest according to Shariah.
Similarly, when purchasing or selling through a bank on installments, proper measures are not taken to avoid interest, making such transactions even more doubtful.
People living abroad often present the excuse that they have no alternative, or they claim that some scholars have allowed such transactions under conditions of necessity.
However, this stance is not entirely valid, because many experienced individuals confirm that avoiding interest-based dealings abroad is indeed possible, and no real compulsion exists in most cases.
It is also worth pondering that when scholars warn travelers before migrating abroad that practicing Islamic rulings might become difficult there, the response is often that there is no such issue and many Muslims live there. But once they arrive, they use the excuse of “necessity” to seek exemptions!
◈ If the price is fixed at the time of sale and no additional amount is demanded for any delay or excuse, then purchasing on installments is permissible.
◈ However, in the mentioned scenario, the increase in rate after two years constitutes a form of Riba, which is impermissible.
◈ It is also possible to avoid interest-based transactions even abroad; therefore, using necessity as a justification for engaging in Riba-based dealings is not valid.
وَاللّٰهُ أَعْلَمُ
A family has moved from Pakistan to England and wishes to purchase a house there on installments. After the price is fixed, the property is obtained on installments. However, if the installments are not completed within two years, then as per government policy, the rate is increased, and the following two years' installments must be paid according to this new rate. Is such a transaction permissible in light of Shariah?
❖ Answer by: Fadhilat al-‘Alim Hafiz Khizr Hayat (حفظہ اللہ)
There are two opinions regarding buying and selling on installments. However, according to our scholars and elders, purchasing on installments is permissible with two essential conditions:
① The price must be fixed at the time of sale, meaning there should be no ambiguity.
② There must be no penalty or additional charges imposed for delay in installment payments.
If these two conditions are fulfilled, then purchasing on installments is permissible. But if these conditions are violated, then the transaction becomes impermissible.
✿ Ruling Regarding the Mentioned Scenario:
In the given case, the increase in rate after two years is a form of interest (Riba). Any increase in payment due to delay in installments or for any reason is considered interest according to Shariah.
Similarly, when purchasing or selling through a bank on installments, proper measures are not taken to avoid interest, making such transactions even more doubtful.
✿ The Excuse of Compulsion in Foreign Countries Regarding Interest-Based Transactions
People living abroad often present the excuse that they have no alternative, or they claim that some scholars have allowed such transactions under conditions of necessity.
However, this stance is not entirely valid, because many experienced individuals confirm that avoiding interest-based dealings abroad is indeed possible, and no real compulsion exists in most cases.
It is also worth pondering that when scholars warn travelers before migrating abroad that practicing Islamic rulings might become difficult there, the response is often that there is no such issue and many Muslims live there. But once they arrive, they use the excuse of “necessity” to seek exemptions!
Conclusion:
◈ If the price is fixed at the time of sale and no additional amount is demanded for any delay or excuse, then purchasing on installments is permissible.
◈ However, in the mentioned scenario, the increase in rate after two years constitutes a form of Riba, which is impermissible.
◈ It is also possible to avoid interest-based transactions even abroad; therefore, using necessity as a justification for engaging in Riba-based dealings is not valid.
وَاللّٰهُ أَعْلَمُ
