How do I calculate Zakat on Property?
- The property you own and live in yourself - If you own a property and you live in that property then there is no Zakat due on it.
- Rental Property - If you own property that is being rented out then Zakat is not due on the value of the property. However, Zakat is due upon the rent you have accumulated from the rental income. Any expenses incurred during the year for the rental property can be deducted.
For example: Monthly Rent = $1,200
Monthly Expenses = $200
Net Rent = $1,000/Month
Total Zakatable amount for the year =$12,000
Zakat due = $300
Please note: If your money goes into a central bank account where you keep all your cash (including cash from rental income) then there is no need to calculate this separately since it will be included in your cash totals.
- Property for sale or with the intention to sell - Zakat is due upon a secondary property for sale (aside from the property that you own and live in) that is either marked for sale or that which you have a clear intention to sell. Zakat is calculated based on the value of the property at the time of selling, or the value at which the property is sold.
- No intention - there is a possibility that you are not clear about the intent behind the property or asset. If this is the case, then there is no Zakat due upon it until you fall under category B or category C as stated above.
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