Asalam u Alikum,
1) I have a fully paid property that I Own, i do not live in it,instead I have rented it out and live in another property in the city using the rental income i get from my property as it is more convenient for me in city.Do I have to pay Zakah on the rental income even though i use 85% of it to pay for my rent and if so how much?
2) I am also confused if Zakah on property is paid on rental income or its Market value?
Please clarify this aspect of zakah.
wa `alaykum salam,
We will try to provide an answer to both questions in Sha Allah. Zakat is not payable on the actual property. Zakat is only on the income received. Your Zakat on the income received will be calculated as follows: Cash on hand less current liabilities. Zakat is 2,5% and is payable on the balance provided it is in one’s possession for one complete lunar year. You may deduct expenses which you think may fall due during the course of the year – like maintenance of your rental facility, etc. And Allah Knows Best.