Question:-
A person has offered to purchase a house and the seller has accepted the offer. Due to the transfer not yet being finalized, the funds have not been transferred from the buyer to the seller. Who is liable for the Zakaat on the cash not yet transferred, the buyer or the seller?
Answer:-
We understand from your query that ‘A’ proposed to buy a house that was belonging to ‘B.’ ‘B’ accepted the proposal and thereby concluded the deal in terms of Shariah. Since, the transaction has been concluded in terms of Shariah, ‘A’ will become the owner of the property and ‘B’ is entitled to the funds.
However, the buyer has not paid the funds as yet. The funds will only be transferred to the seller when he is legally registered as the owner of the property, although he is already considered as the owner in terms of Shariah, since the transaction has been concluded. The purchase price will therefore be considered as a debt upon the buyer. He may therefore deduct the debt from his Zakaatable assets. For example, his Zakaatable assets in total (which includes the cash kept aside to pay for the property) is R2 000 000.00. The property was purchased for R1 000 000.00 which is a debt upon the buyer. Hence, he will only pay Zakaat on R1 000 000.00.
The seller will be required to pay Zakaat when he receives the funds. For example, his Zakaat date is the 1st of Ramadaan every year. He received the funds on the 1st of Muharram 1444 (4 months after his Zakaat date.) He will have to pay Zakaat on the R1 000 000.00 for Ramadaan 1443 as the monies were already due to him then. Alternately, he can pay the Zakaat on the 1st of Ramadaan 1443 and he doesn’t have to pay later when he receives the funds.
ALLAH TA’ALA KNOWS BEST!
ANSWERED BY:
Mufti Mohammed Desai
Date: 28 Shabaan 1443 / 01 April 2022
