Zakat On Proceeds From Selling Home
Question
Assalam Alaikum. We sold our primary home a few months ago and living on rent for now while waiting for a delivery of a new home later next year. The proceeds from the old home fall under zakat nisab. Once one year is over, do we need to pay zakat on it even though it would result in a shortage of funds for the new house and we might need to take a loan to make up the shortage? Jazak’Allah Khyrn.
Answer
First it is important to clarify that zakat is paid according to a particular zakat date. Money which has come into your ownership does not have to remain in your ownership for one year before zakat is due. Please see the following video to determine when zakat should be paid and how to determine your zakat date.
In your question you mention ‘delivery of a new home’. It is not clear whether you are just buying an already existing house and are waiting for completion or you are engaging in a contract to have a new house built and delivered.
In the first case where you are just buying an already existing home, if the contracts have been exchanged or there has at least been a verbal or written exchange of offer and acceptance then the sum of the new home will be a debt on you and therefore that sum can be deducted from your zakat balance and you would not have to pay zakat on that amount. If contracts have not been exchanged or there has not been an exchange of offer and acceptance then the amount put aside for the purchase of the new home will be zakatable even if this leaves you with a shortfall that you will need to make up.
In the second case where you are purchasing a new build and are waiting for delivery, if the contract has already been signed, as it seems to be the case in your scenario because you are just waiting for delivery, then the amount due to be paid for this property will be a debt on you and therefore would not be zakatable. If a contract has not been signed and there has been no communication of an offer or acceptance then zakat will be payable.
Answered by:
Ifta Research Fellow
Checked & Approved by:
Mufti Abdul Rahman Mangera
Mufti Zubair Patel
Source:
https://fatwacentre.org/uncategorized/zakat-on-proceeds-from-selling-home/