Are you also wondering about the Zakat application to your wealth? Zakat is an obligatory responsibility for every Muslim. The payable amount depends on your wealth and is calculated based on your property, money, land, gold, and other valuables that you haven’t used for a 12-month period. Zakat is one of the five pillars of Islam and is a religious obligation for every Muslim in Pakistan. But, how would you know about the right quantity of zakat you have to pay? This question is always asked by many people, and answering it accurately is always the responsibility of transparent and expert hands. In this post, we will discuss the zakat calculation on property.
Importance of Zakat
Before we get into how you are going to calculate zakat, we must realize the importance of zakat in Islam. Zakat is one of the main fundamental pillars of Islam. There is no better method of purification of wealth and soul than Zakat. Zakat gives the poor their right, which they have over our wealth. If Allah has given us wealth, we must use it to help the underprivileged section of society.
Zakat on Property
So, Nisab is the financial criteria set for every Muslim based on which the amount of zakat can be calculated. Like other financial assets, your property is also one of the financial assets that comes in the list if Nisab and the zakat rules apply to it as well.
We will guide you on how to calculate zakat, and how this amount varies from one financial asset to another. We will also discuss the eligibility for the zakat, the collection method, and the right distribution.
Important: Nisab Zakat 2025 declared by the State Bank of Pakistan is PKR 179,689.
When is your property eligible for Zakat?
Zakat cannot be applied to every type of property you own. You can buy and own a property for reselling and rental purposes and will still have to pay Zakat. That means if these assets are used to make profits and income, they could be eligible for Zakat.
Land for Reselling
If you are buying any land for reselling purposes, that means it is a commercial property. Also, such assets are part of a Nisab, and the amount of Zakat payable for this land is calculated according to the value of the property.
Land to Build a House
If you buy land to build a house on it and then rent it out, understand that this property is not eligible for Zakat. However, in case you start saving this rental income, you will pay zakat from this money because you own it. We suggest that you must calculate Zakat accurately every time you have to pay it according to the measure of money and property you own.
Build for Reselling
If you construct any residential building to resell it, you will have to pay zakat on the money you earn from it. The amount you have to pay will be 2.5% of the money you make by selling the building. You will have to pay it as soon as you receive the money to avoid any complications in the future.
What is the Nisab to Pay Zakat on Property?
The main thing to understand when paying Zakat is the Nisab that applies to your money and wealth. Nisab is the minimum amount needed for a person to pay Zakat. According to the Islamic Sharia laws, the Nisab is applicable to a minimum of 3 ounces (87.48 grams) of gold or money equal to its price. For silver, there must be 21 (612.36 grams) or more ounces or money equal to its price.
How To Calculate Zakat on Property
We all understand the fluctuation in the prices of silver and gold with time, which also affects the total amount payable. This is why it is crucial to check the local market prices of silver or gold and calculate Zakat according to the current prices.
Steps to Calculate Zakat on Property
Calculating zakat on property is very easy and simple if you follow these easy steps.
Firstly, calculate the Nisab you own, and for this, you have to count all your money and assets eligible for Zakat.
Now check the rental properties, land, or buildings you have owned for more than a year. Calculate their worth and add them to the Nisab you own.
Once you are done calculating the tidal worth of your assets, multiply the sum by 2.5% to get the actual amount of Zakat you have to pay.
Who is Eligible to Receive Zakat Money?
As mentioned, the purpose of Zakat is to exchange money between affordable property and the needy. Zakat is only for people who are in need and can’t afford a basic and balanced life. Here is a list of people who can take Zakat:
- Slaves
- Unemployed person
- Disabled people
- People in debt
- Needy people
Example of Zakat on Property
Here is the easy formula of zakat on property:
- Total property value = Rs. 1,500,000
- Total Value of Property x 2.5%
- Rs. 1,500, 000 x 2.5% = Rs. 37,500
- Your Zakat amount due is Rs. 37,500, which can be paid throughout the year.
Wrapping Up
This write-up proves must be beneficial for you in understanding how to calculate zakat on property. Zakat is a religious task obligatory for every Muslim, and it purifies your money. However, it also plays a big role in the provision of wealth to the needy by those who have a handsome amount of it. Zakat is crucial for every Muslim, and you can easily determine it on the Nisab you own. Pay Zakat, get Allah’s blessings, and purify your wealth.
