Do I pay zakat on rental property?
Not on the property itself. According to most scholars, a house or apartment you rent out is like a tool that produces income, so its value isn't zakatable. What you pay zakat on is the rental income you've saved, which counts as cash on your zakat date. Property bought to resell for profit is treated differently.
The property's value is exempt
The Prophet Muhammad ﷺ said there is no zakat on a Muslim's horse (Sahih al-Bukhari 1464), and scholars applied the same idea to assets that you keep and use rather than trade. A rental property is kept to earn income, like a taxi a driver owns or a machine in a factory. So the four schools don't require zakat on the building's market value.
Rental income
Rent you receive becomes part of your cash. On your zakat date:
- Add the rent you still have (after expenses you've already paid) to your other savings.
- Subtract debts due now, like this month's mortgage installment or a repair bill.
- Pay 2.5% on the total if it's above the nisab.
Rent you spent during the year isn't counted. See How do I calculate my zakat?
Property bought for resale
If you buy property to renovate and sell, or to flip when prices rise, it's trade goods. Zakat is due each year on its current market value, as with stock in a shop. If your intention changes, for example you decide to sell a rental you'd planned to keep, many scholars say it becomes trade goods from that point. See Do I pay zakat on my business?
Another view
Some contemporary scholars suggest paying zakat on net rental income when it's received, by analogy with crops, instead of waiting for a year. Most scholars and fatwa councils stick with the classical approach above, but if you follow this view, apply it consistently. If the property is financed with an interest-based mortgage, see Can I have a mortgage as a Muslim?
- No zakat on the value of a rental property.
- Saved rental income counts as cash.
- Property for resale is zakatable at market value.
- Some scholars suggest zakat on rent when received.
People also ask
Do I have to pay zakat if I have debt?
It depends on the debt. Many scholars let you subtract debts due now, not a whole mortgage or student loan. Views differ.
Read the full answer →Do I pay zakat on my business?
Yes, on your stock for sale, cash and money owed to you, minus short-term debts. Equipment and premises are exempt.
Read the full answer →Do I pay zakat on gold jewelry I wear?
Scholars differ. The Hanafi school says yes; most others say no for jewelry worn normally. Gold kept as savings is zakatable.
Read the full answer →Do I pay zakat on my house and car?
No. There's no zakat on the home you live in, your car or other personal belongings. Property bought to resell is different.
Read the full answer →Do I pay zakat on crypto?
If you hold crypto, most scholars who allow it say yes: 2.5% of its market value on your zakat date. Here's how to handle it.
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