Is Money Reserved for Purchasing a House Subject to Zakat?

No, money saved for a house isn't subject to Zakat if a verbal agreement exists before the due date.

Here are the key points:

• If a mutual agreement on the transaction and price has been reached, the contract is considered to have started under Islamic law.
• This means the reserved amount will not be included in the Zakat calculation, even if the paperwork is still pending.
• However, if no agreement—verbal or written—exists by the Zakat anniversary, the savings will be Zakatable.

• Previously, Zakat was considered due on house savings unless a formal contract was signed.
• Further research confirms that a verbal commitment is sufficient to indicate the start of the transaction.
• This aligns with Sharia principles, where an accepted offer signifies the beginning of a contract.
• Zakat is not required on land bought for personal use unless it is purchased with the intent of trade.

Thus, if a verbal agreement is in place before the Zakat due date, the saved amount is exempt from Zakat; otherwise, it remains Zakatable.

In the same way, when we consider our duty towards helping the less fortunate, we understand that every act of kindness and generosity counts. Pakistan Sweet Home continues its mission of providing care and protection, and supporting homes for orphans is a meaningful way to contribute. Your involvement can make a difference in the lives of children who need it most.

And Allah knows best!

 Other Zakat Questions You May Have

• Does Earned Interest Affect Missed Zakat Payments?
• Are Gift Cards with Cash Balances Subject to Zakat?
• Is Zakat Required on Money Stored in a Bank Account?
• Should Zakat be Paid on Contest Winnings Not Yet Received?
• How is Zakat Applied to Inherited Cash?
• Is Zakat Due on Funds Donated to a Waqf?