Dear respected scholar,

I bought a last year house through Devon Bank murabaha contract agreement. My question is: for the purpose of calculating zakat, do I deduct the entire price of the house I owe the bank (in 15 years) or only the amount that I have paid so far towards the house? I have researched the web and found opposite opinions on this issue. Please clarify.

Secondly, if I bought some real estate for the long-term i.e. keep it for 10-15 years (for selling OR to build a house on it - i am not sure yet), do I have to pay Zakat on it, even if I don`t intend to build a house on it just yet?

Jazakallahu khairan,

AAWW

1- The paid amount is deducted already.
When your zakat payment is due, you need to deduct the (due loans) only. In other words: the monthly payment you have to pay off in the same month of paying your zakat is to be deducted only.

2- You should specify your intention from the beginning; If the property was bought for residential purposes, then it is not Zakatable even if you did not build a house on it, as long as it is designated for this purpose, otherwise (if it was bought for commercial purposes), then it is Zakatable on an annual basis based on its market price.

In your case; since you did not specify your intention from the beginning, I would suggest you paying its zakat, especially if you have (most probably) your own residential house.

By doing so, you keep yourself in the safe side- which is something highly recommended-especially when it comes to perform a formal act of worship like Zakat.