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Zakat and Islamic home loan



As salamualykum ,
JazakAllah kahir for your detailed lecture on the zakat it was very informative Alahmdulliah.
Can you please clarify/elobrate regarding the calculation of the zakat if one have a long term home loan, from your lecture i came to an understanding that one can deduct 12 months of advance payment from the total zakatable $.
I currently own a house which we use for our primary resident on which i am paying monthly installments which are due for next 28 years.
Thank you



In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Your understanding is correct that the loan amount that you owe within the next 12 months will be deducted from your total Zakatable wealth. Thereafter, you will be pay 2.5% of the remaining amount for Zakah.

For example: If one’s Zakatable wealth is equal to $100,000 and each month’s installment towards the house is $3,000, then total $36,000 will be deducted from the $100,000. Hence, 2.5% of $64,000 will be due as Zakah. That is $1,600 total Zakah.

Note: The following are Zakatable wealth:

  1. Cash (Including money in the bank, at home, and all receivable loans that one expects to be returned)
  2. Gold
  3. Silver
  4. Business merchandise (Any item purchased with the intention to sell)

And Allah Ta’āla Knows Best

(Mufti) Abdul Azeem bin Abdur Rahman

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