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The question

How is Zakat calculated on shares of real estate investment trusts, and is Zakat obligatory on re-invested profits before a full year has passed on them?

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Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 20261 min readAlso available in العربية
The answer

If the company's business is buying and selling land, or building and then selling it, then its shares are considered trade goods and are subject to trade zakat. The real estate prepared for sale is valued at the completion of the hawl (one lunar year), and cash and hopeful debts are added to it. Its zakat is then paid at a rate of 2.5% of the total. If the company does not pay zakat, then each shareholder is responsible for the zakat on their share if it reaches the nisab (minimum threshold). The hawl begins from the acquisition of the money used to purchase the shares. Profits follow the principal in the hawl of trade. If the profits are received before the hawl and spent or invested in something for personal use (acquisition), then there is no zakat on them. However, if they are invested in shares for trade, then the hawl of the new shares is the same as the hawl of the original shares.

Summarized from the full answer at Ftawy · imported

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Ftawy
Original fatwa ID
13483
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