A house is only considered a zakatable asset if it is purchased with the intention of resale. In this case, it is classified as business inventory, making it subject to Zakat, just like other trade goods. If the house is held for the purpose of selling it for profit, Zakat is due annually on its market value.
However, if a house is bought for personal use, such as to live in or for one’s family, it is not considered a zakatable asset. Primary residences, vacation homes, and rental properties (as long as they are not purchased for immediate resale) are exempt from Zakat.
That said, Zakat may still apply to cash proceeds from selling a house. If you sell a property and receive the payment before your Zakat due date, and that cash remains in your possession when Zakat is due, then Zakat must be paid on that amount.
Still have questions?
Our typical response time would be within 5 days from the time your question was posted. Responses provided will be according to our Zakat policy.