Zakat on a plot which was to be sold but didn’t sell

Bismillahi Ta’ala

Walaikum Assalam Warahmatullah,

Real estate will only be subject to zakāt if it was purchased with the express intention of reselling it. Even if the land is purchased with the intention of holding it while hoping for the price to increase, zakāt will not be due because there was no explicit intention to resell. (Fatāwā ‘Uthmānī 2/41).

There are two aspects to address in your question.

1. Is zakāt due in the first place? If you purchased the plot and the house, intending at the time of the purchase to resell them, they are subject to zakāt. If you did not have the intention to resell them at the time of purchase and later decided to sell them, they would not be subject to zakāt. Therefore, the ruling for your plot is based on your intention at the time of purchase.
2. If they were subject to zakāt and, as you stated in your question, you had not been paying zakāt on them, you would need to determine whether they were in your possession on your zakāt due date. If they were, you would retroactively pay zakāt on them by determining their market value on the zakāt due date for each year and paying 2.5% of it in zakāt. If they were not in your possession on your zakāt due date, you will not have to do anything.

Summary:

1. If, at the time of purchase, you intended to resell the plot, you will have to pay 2.5% of its market value in zakāt every year that you hold it.
2. If you had any intention other than resale at the time of purchasing the house and the plot, there is no zakāt due on them.
3. Even though the house has been sold, if it was purchased with the intent of resale, you will retroactively pay zakāt on it and the plot for the years that they were in your possession on your zakāt due date, and continue paying on the plot for each year remains in your possession.

Wallahu A’lam

And Allah Ta’āla Knows Best
Mufti Wahhaj
Checked and Approved by
Mufti Yusuf