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Delayed Zakah payment on piece of land and built a house on it to live in it

Question

Assalamu Alaikum. I purchased a land about 2 years ago and not paid zakat on the land value. Now, I have sold the land and from the appreciated value of the land, i have started constructing "home" (this is my first home to live). Should I pay zakath on the sold land or not since I am using the money to build a home for my family and not investing in business. Thanks & Jazakallah Aqheel Ahmed

Answer

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.

If you had bought the piece of land with the intention of trading in it, then it is considered as a tradable item. So, if a whole lunar year elapsed on the money with which you had bought the land and it reached the Nisaab (the minimum amount liable for Zakat) and the land sustained the value of Nisaab throughout the lunar year, then it is an obligation to pay the Zakat on it when a whole lunar year elapsed on it. Therefore, if you had bought the land with this intention, then you were obliged to evaluate it each year when a whole lunar year elapsed on it and should have paid the Zakat. If you had not done so, then you are now obliged to pay this Zakah and you are not exempted from paying it due to ignorance or due to spending the money on something else.

Therefore, you should look at the price of the land for each single year and pay the obligatory Zakat on it.

Similarly, if the money with which you bought the land had reached the Nisaab before buying it and a whole lunar year elapsed on the money but you did not pay Zakat on it, then you are now obliged to pay it.

However, if you are in hardship, and you do not have money to pay Zakat, then it remains as a debt which you have to pay when you will become able to do so.

On the other hand, if you did not buy the land with the intention of trading in it, then it is not an obligation to pay Zakat on it even if you sell it afterwards. Also, it is not an obligation to pay Zakat on the land if its value did not reach the Nisaab even if you had bought it with the intention of trading in it; it is only an obligation to pay Zakat on the money with which you had bought the land according to the details which we mentioned above.

However, after selling the land, if its price reaches the Nisaab by itself or with other money added to it and a whole lunar year elapses on it, then Zakat must be paid on it as well.

Allaah Knows best.

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