Is It Required To Pay Zakat For The Real Estate Bought For Trade Or Investment Purposes?

Is it required to pay zakat for the real estate bought for trade or investment purposes?

Real estate owned with the purpose of trade is subject to zakat. This applies to the real estate properties that a person purchases and sells with the purpose of trade as well. Accordingly, zakat must be given at the rate of 1/40 (2.5%) out of real estate properties owned not for use as residency or office but for sale and purchase, after deducting their annual expenditures and after one year passes upon being in possession and if their value reaches to nisab amount (Kasani, Bada’i, II, 20).

The zakat for real estate properties purchased with the purpose of trade or investment, meaning in order to sell when their value increases later, is calculated based on their market value of that very year. On the other hand, the lands purchased to construct residency or workplace on or with the purpose of farming are not subject to zakat.

Source: Presidency Of Religious Affairs The Turkey, High Board of Religious Affairs FATWA