Complete Shar‘i Ruling on Zakat for a Rented Property
Source: Fatawa Arkan-e-Islam❖ Ruling on Zakat for a Rented House
Alḥamdulillāh, waṣ-ṣalātu was-salāmu ʿalā Rasūlillāh, ʿamma baʿd!
✔ 1. Zakat on the Property's Value
If a house is kept specifically for rental purposes, Zakat is not obligatory on the value of the house itself.
✔ 2. Zakat on Rental Income
Zakat becomes obligatory only on the income generated from rent, provided that:
- A full lunar year has passed on the rental contract and income.
- If a full year does not pass after the contract, no Zakat is due on that amount.
Example:
If a person rents out his house for ₹10,000, and receives ₹5,000 at the time of the agreement, but spends it. Then after six months he receives the remaining ₹5,000 and spends that as well before a full year passes,
⟶ No Zakat is due in this case, as the year has not completed.
✔ 3. If the House is Meant for Trade and Temporarily Rented
If someone has intended the house for trade (i.e., to sell it later), and is only renting it temporarily before selling, then:
- Zakat is due on the value of the house because the intention is business.
- Zakat is also due on the rental income, provided a full year has passed on it.
❖ Importance of Intention (نیت کی اہمیت)
Zakat on the property’s value is only obligatory when the owner has intended it for trade, not merely to earn rent.
Any item meant for trade and profit falls under Zakat.
This is based on the Hadith of the Prophet ﷺ:
«إِنَّمَا الْأَعْمَالُ بِالنِّيَّاتِ وَإِنَّمَا لِکُلِّ امْرِئٍ مَا نَوَی»
"Indeed, actions are based on intentions, and every person will have only that which he intended."
(Saḥīḥ al-Bukhārī, Kitāb Bad’ al-Waḥy; Saḥīḥ Muslim, Kitāb al-Imārah, Ḥadīth: 1907)
❖ If One Owns Wealth Intended for Trade
- His intention is focused on the monetary value, not the object itself.
- This value is usually assessed in silver (dirhams) or cash.
- Zakat is obligatory on both silver and cash.
Conclusion:
❖ If the purpose is only to earn rent,
⟶ Zakat is due only on the rental income, not on the property's value, and that too only after a full year has passed.
❖ If the purpose is trade and rental,
⟶ Zakat is due on both the value of the property and the rental income, subject to the completion of a lunar year after the intention and receipt of income.
ھذا ما عندي والله أعلم بالصواب
