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.

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?