zakaat on property

Question ID: 31104

As-salaam-u-alaikum. Esteemed Mufti saab, i am a builder by occupation. In 2002 i bought a piece of land cash and took a loan from the bank and built a house with the intention of selling it and re-investing all the monies in the same manner until i had enough money to buy/build a house of my own without having any bonds/loans owing on it. However in 2007 i made nikah and used the house as my personal residence for a year, but my intention was to still sell the house. In 2008 i learnt that interest based bonds are against shariah and i immediately tried to sell the house to settle the bond. I also moved out of the house in 2008 and because i could not get a buyer and could not afford paying the bond from my own pocket, i rented out the house to pay the bond. However between 2008-2012 though the house was rented out i still made every effort to try and sell it. Al-hamdulillah in March 2012 i finally sold the house. From 2002 till 2012 i did not pay zakaat on any of the monies invested in the house or on the rentals received (as the rental was used to pay off the bond). If there was any zakaat to be paid, how do i calculate the zakaat in this case?
Secondly, from the balance of the money left after selling the house (in March 2012), i purchased another piece of land, and Insha-Allah i intend building a house (cash -without any bonds/loans). I intend selling this house and re-investing the monies in the same manner until i have enough finance to build my own home (in an area where there is musjid and madressah so that mine and my childrens deeni obligations are not compromised). I could build a house of my own after about 2 projects, but i intend building up the capital to a sizeable amount which would allow me to build my own home and still have funds to invest in property to bring in rental income,(so that i can spend more time in jamaat/deeni work etc. Rental income seems to be the best way for me to earn an income whilst freeing up time for deeni work). During the period of me building these houses for resale, how would i calculate my zakaat? Do i have to pay on the value of the land and building materials? or do i have to pay on the cash that i have on-hand for a period of 12 months? or both of the above? However i have to let you know mufti saab (just in case it has an effect in calculation of the zakaat), that although i dont currently own my own home, i am living with my mother.I have extended her house from a single storey to a double storey (at my own cost) and the extension is to house my family, (as i compromised with my wife that i will give her (my wife) her own living space as long as i can live close to my mother so that i can take care of her in her old age.) Though there is no pressure from my mother to move out and i dont have to pay rent, my concern to want to own my own home is because if my mother passes away i dont want to have any problems with the heirs re inheritance. Thirdly, in 2002 i earned interest money from a fixed deposit (may ALLAH forgive me). This interest i invested as part of building the first house. Now that the house is sold and i have the money back, can i donate the money towards a jamaat khana (without expecting any reward)? or what else can i do with this money? Maaf for sending in such a lengthy question. Jazak-Allah for all your efforts and may Allah reward you and all those who are assisting the ummah.

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Asked on November 16, 2012 12:01 pm
Private answer
1) You will pay on the amount you got at the time of calculation.
2) Donate the money to a poor needy person.
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Answered on November 16, 2012 12:01 pm