Q. I own a property and I am building blocks of flats on the property to sell to the public. I have completed building half of the blocks of flats on the property and it is available for purchase to the public. The market value of the completed block of flats is 10 Million Rands. Do I have to pay Zakaat on the flats?
A. In the enquired case, Zakaat will be payable on the market value of the flats that were built with the intention of resale on your Zakaat due date as it is considered stock in trade. If the flats are sold before your Zakaat due date, Zakaat will be payable on whatever monies remain in your possession after the sale on your Zakaat due date.
On the other hand, if the flats are built as an investment where it is leased out to tenants, Zakaat will not be payable of the full market value of the flats. Zakaat will only be payable on the rentals received which remain in your possession on your Zakaat due date.
Allah Ta’ala Knows Best
Mufti Ismaeel Bassa