Dear Imam. My friend has a property with annual rental income of 15,000 dollars. He uses this money for family use. He also owns a piece of land worth 16000 dollars. At the same time he has a loan from the bank to the amount of 30,000 dollars. He is employed with 6 figure salary but his savings are Zero. He intends to pay off loan as soon as his financial situation improves. My question is How much should he pay for Zakah?

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 is His slave and Messenger.

It is an obligation to pay Zakah on the salary and rent money if it reaches the Nisaab (the minimum amount liable for Zakah) and if it stays in one’s possession until a whole lunar year elapses over it; in which case, he should pay off 2,5%. However, if he spends it before a whole lunar year elapses over it, then he does not have to pay Zakah on it.

As regards the debts that your friend has, then if he has property – like estates and/or lands – on top of his necessary needs, and he can use it to pay off all his debts, then he should pay Zakah on all his savings from the salary or from the rent if the condition that we mentioned above is met, and he should not deduct from it the amount of his debt. Likewise, if he has property which he can use to pay part of the debt, then he should consider the value of this property as payment for part of the debt, and he would deduct the remaining part of the debt from the money on which he is obligated to pay Zakah, then he pays Zakah on the remaining amount if it is not less than the Nisaab. For example, if the value of the land is 16,000, and the debt that he has to pay is 30,000 and the land is on top of his necessary needs, then he should subtract the 16,000 from the 30,000 and the remaining will be 14,000, and if he gathers from the salary and from the rent the amount of Nisaab and a whole lunar year elapses over it, then he should subtract from it 14,000 and then pays Zakah on what remains if it reaches the Nisaab.
On the other hand, if he had bought the land which he possesses with the intention of trading with it, then he should pay Zakah on its value when a whole lunar month elapses on it as we clarified in Fatwa 81404.
Also, for more benefit on the prohibition of borrowing money with Riba (interest and or usury), please refer to Fatwa 81346.

Finally, if your friend is able to ask by himself, then it is more appropriate for him to ask about what Allaah made incumbent upon him to do, rather than appointing someone else to ask on his behalf in regard to such matters that needs clarification and explanation.

Allaah Knows best.