Zakaah on Land
Land that is acquired to be rented out, there is no zakaah on it. The fact that one took possession of the land with the intention of selling it means that zakaah is due on it every year, so one should calculate the value of the land at the end of the year and pay zakaah on this amount if the value reaches nisaab. The rate of zakaah that must be paid on it is one-quarter of one-tenth, i.e. 2.5%. al-Sharh al-Mumti’, 6/149, Fataawa al-Lajnah al-Daa’imah, 9/331. Q9:103, Fataawa al-Lajnah al-Daa’imah, 9/324, 325.
Zakaah on Savings and Fluctuating Savings
Zakaah is only due on saved wealth and that saving reaches the nisaab (threshold or minimum amount), and one year has passed. In a situation where a person has a monthly salary or wages and he spends all of it and has nothing left, so that at the end of the month he has spent all his money, then he does not have to pay zakaah, because for zakaah to be obligatory, one full year must have passed (i.e., one full year from the date of his taking possession of the nisaab, the minimum amount of wealth on which zakaah is due).
The employee with a salary will find himself in one of the following two situations:
- He spends all of it and does not save anything, in which case he is not obliged to pay zakaah;
- He saves some of it, sometimes more and sometimes less.
However, zakaah is only due when the salary or saving reaches the nisaab and one full year have passed without reduction. One can make a schedule of his earnings from the date it reaches nisaab and write down every amount and the date on which he took possession of it. Then he should pay zakaah for each amount separately when one year has passed from the date on which he took possession of it, this is somehow technical. But one wants an easier method and wants to be more generous and give precedence to the poor and others who are entitled to zakaah over himself, then he can pay zakaah on all the money he possesses when one year has passed from the date when his wealth first reached the nisaab. This will bring a greater reward and raise him higher in status; it is easier for him and is more generous towards the poor and needy and others who are entitled to zakaah. Whatever extra amount he may pay will be regarded as a “down payment” on the zakaah for any wealth for which one year has not yet passed. (From Fataawa al-Lajnah al-Daa’imah, 9/280-281).
Shaykh Ibn Baaz (may Allah have mercy on him) said: With regard to money that is being saved for marriage, or to build a home, and so on, it is subject to zakaah if it reaches the nisaab and one year has passed since it reached the nisaab, whether it is in the form of gold, silver, or paper currency, because of the general meaning of the evidence which indicates that zakaah is due on whatever reaches the nisaab, after one year has passed, without exception. Majmoo‘ Fataawa Ibn Baaz (14/130), Fataawa al-Lajnah ad-Daa’imah (9/200)
Note: If the amount of money decreases and drops below the nisaab during the year, then no zakaah is due, and you start reckoning the year anew when the amount of money reaches the nisaab again.
O Allah, we hope for Your mercy, do not leave us for even the duration of an eye blink (duration) and correct our total condition and grant us understanding. Besides You there is none worthy of worship.