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Zakat on land prepared for building on it

Question

Assalamu Alaikum, I recently bought a plot away from city center, and as of today i m not sure whether i'll construct a house or sell this plot and buy another plot/flat near to city center. i did this just to avoid keeping my money in bank. Now i kindly like to ask you that, do i need to pay zakah on this plot? Jazaak Allah u Khair.

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.

Since you did not buy the plot with the intention of trading and waiting for its price to go up in order to sell it with a higher price [a profit], then you are not obliged to pay Zakat [obligatory charity] on this land. It is only an obligation to pay Zakat on the land which is prepared for trading with the purpose of getting a profit from it, in which case it is considered as a tradable item as already clarified in Fatwa 86227.

As regards the land which is prepared for building on it, no Zakat must be paid on it, even if it is sold in order to be exchanged, as this does not affect the obligation of paying Zakat on it, as in principle it is land which is bought for possession.

Allaah Knows best.

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