Dear Sheikh, Asslam-u-alikum.

I would like to raise a query with regards my zakat payment for this year.

·         I have been paying Zakat for the last few years and my zakat payment date is Ramadhan

·         I currently own a house with a value of approximately £100,000

·         I am purchasing a house to the value of £185,000.  We get possession of the house on the 31^st August

·         The house will be financed by £122,000 Islamic mortgage and £30,000 loans from family – the mortgage is in both my wife and my names

·         My mortgage repayments will be around £580 a month

·         We have not agreed repayment yet for the personal loans but we are planning to start paying back after 1 year

·         When we move into the new house we plan to refurbish the old house at a cost of around £10,000.  Once the house is refurbished we will either rent the house out or sell it to cover the loans borrowed.

·         I own shares that are currently valued at £3,300

My questions:

1.       How would my zakat be calculated? 

2.       Do I have to pay Zakat on the value of the old house considering I have personal and mortgage loans to pay?

Answer:

No Zakat is payable on the houses. You have to pay Zakat on the shares and any cash, gold you have. If the loan you took from the family is payable within a year, then you can deduct it from your total zakatable money, otherwise not.