Question:
It is said that if plot of land is bought as business there is Zakat. What if we buy a plot of land (with the aim of selling it) and kept it for more than one and half lunar year without selling? Do we have to pay Zakat by calculating the value of land after 1 lunar year? What if we do not have any other income? Or we have just income for our daily living? Do we have to immediately sell the plot of land and pay Zakah? Hope you will answer this question.
Fatwa:
All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His Slave and Messenger.
If one buys land with the intention of trading in order to get a profit, then it is considered as a tradable item, therefore Zakat has to be paid on it when a complete lunar year elapses on the capital money with which the land was bought if it reached the minimum amount liable for Zakat and it was cash money i.e. gold or silver or other notes that have the same value. So, 2.5% has to be paid when Zakat is due regardless of the price with which the land was bought.
Indeed Zakat has to be paid on this land even if one keeps it for many years as long as his intention is to trade it and expect a profit. Hence, you have to pay out Zakat for each lunar year during which it is in your possession.
In case one does not have money to pay out the Zakat for this land, the author of Al-Muntaqa, may Allah have mercy on him, said: 'If one has a profit less than an amount that is liable for Zakat, or that he does not have any profit at all, according to those who are of the view that it is an obligation on him to pay the Zakat, then it is reported that Imaam Maalik, may Allah have mercy on him, said that in such a case a person has a choice either to sell a tradable item and then pay Zakat, or to give out any tradable item [of the items that one has] of the same value due on him to the people who are eligible for Zakat.'
Finally, if you are unable to do one of the above options, then Zakat remains as a debt and a burden on you that you have to pay whenever that is possible.
Allah knows best.
Fatwa answered by: The Fatwa Center at Islamweb