I am planning to buy a house in my home country for which I have 50% of the price and the other 50 % I will be taking a loan. This house is for investment purpose. After purchasing it I will be renting it out so that I can pay the installments from the rent.
My question is do I have to pay zakat on this house and if yes than on what amount? On the total value or on the rental income
My dear brother in Islam,
Assalam u Alaikum Wa Rahmatullah,
There will be no Zakah on the house that you plan to purchase and place it for rent. Since the Zakah on a property will become obligatory when a property is purchased only for the purpose of sale.
In case of purchasing a property and then leasing it to tenants, Zakah will only be due on the rental income which essentially is added to the rest of Zakatable assets and then included in Zakah calculation.
And Allah knows best.
Mufti Ikram ul Haq
Fatwa Center of America