Salam alikum
I have a question please?
How is the zakat to be paid at a used car dealership?
Assuming I have a portfolio of 100,000 euros in the first year, after one year my inventory is worth 190,000 euros.
Do I have to pay the zakat for all vehicles currently in my fleet with a value of 190,000 euros?
Or how about a car dealer with zakat
Thanks in advance
Wasalam
May Allah bless you.
If you have purchase the cars for resale, then you must pay zakat on the current value of the portfolio.
And Allah knows best!
Salam alikum
Thanks for your answer brother.
The same applies to real estate
When I bought a property to rent out
Do I have to forego the value of the property also zakat?
Or how is it there?
May Allah reward you
There is no zakat on the value of properties bought to let out.
Only the cash you receive from the rental income will be subject to zakat along any other cash that you have on the zakat day.
And Allah knows best
OK thanks for the answer
May I ask you why that is?
Why. Does a car dealer who buys the cars to make money pay zakat on the value of the cars?
But a real estate owner who buys a house to earn money by renting does not pay on the value of the property?
Finally both are capital investments after all?
Excuse me for asking so many questions I just want to understand better?
Barakallahu fik
In Islam, trading assets are recognised as zakatable assets i.e. an asset bought with the intention to resale.
A buy to let property does not fall under this category.
And Allah knows best!