Complete Sharʿi Ruling on Rental Property and Retirement Money
Source: Aḥkām wa Masāʾil, Zakāt Issues, Volume 1, Page 269
❖ Question
➊ A man has two houses. He lives in one, while the other is rented out. The price of either house is one lakh rupees. He has no cash money. In this case, is Zakāt obligatory on him or not?
➋ When a government employee retired, he received fifty thousand rupees as a retirement fund. With this amount, he established a shop. The annual income from this shop barely covers his household expenses. In this case, is Zakāt obligatory on him or not?
❖ Answer
Al-ḥamdu lillāh, waṣ-ṣalātu was-salāmu ʿalā Rasūlillāh, ammā baʿd!
① Ruling on Personal Residence and Rental Property in Zakāt
✿ Personal Residence: The house in which a person resides is not subject to Zakāt.
✿ Rented Property:
Zakāt is not due on the original value of the rented-out property.
However:
◈ If the rental income, combined with whatever cash he possesses, reaches the niṣāb (i.e., 52.5 tolah of silver or its cash equivalent), then Zakāt becomes obligatory.
◈ If the rental income and other cash are less than the niṣāb, Zakāt is not obligatory, though it may still be given with the intention of reward.
② Ruling on Retirement Money and Shop Income in Zakāt
✿ Retirement Fund (50,000 rupees):
◈ If the amount includes interest, that portion is ḥarām, as the Qur’an clearly states: «وَحَرَّمَ الرِّبٰو».
◈ The portion free of interest will be considered lawful earnings, provided the previous government job itself was sharʿī compliant.
◈ If the employment itself was unlawful in Sharīʿah—for instance, working as a clerk, manager, or official in an interest-based business—then the salary and benefits earned from that job are not permissible.
✿ Shop Income:
◈ If the shop’s income reaches the niṣāb, then Zakāt is obligatory, whether it barely covers household expenses or covers them with ease.
◈ Niṣāb amount: 52.5 tolah of silver or its equivalent in cash.
هٰذا ما عندي والله أعلم بالصواب
