Home Zakat Information 12.9 Real Estate Investments in Property Owning Companies
12.9. Real Estate Investments in Property Owning Companies
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Real Estate investments (not house under personal use) are also required to be included in Nisab when calculating Zakat. In case your real estate is on rent, Zakat applies on rental income only. In case of real estate business (as merchandise), Zakat will be calculated on the actual property value. Suppose there are loan accounts held by the members of a company or corporation whose main asset is an immovable property which produces income in the form of rentals. Such loan accounts represent moneys owed to the members thereof. The original funds (whether in the form of share capital or loan account) contributed to the company, which in substance are represented by the fixed property concerned, should not be taken into account and should be deducted from the amount of the loan account standing to the credit of the member at the end of the Zakat year concerned. The difference, which is attributable to profits or subsequent cash injections, is subject to Zakat each year and is treated as cash for Zakat purposes.

 

Item
Value
Capital & Loan accounts at the end of Zakat year
$50,000
Less:

 

Original funds contributed
$30,000
Balance subject to Zakat at the rate of 2.5%
$20,000
2.5% of $20,000
$500

Table 2: Example for Zakat on Small Business

 

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Sitara-e-Isaar Awarded to Hidaya Foundation

The sister organization of Hidaya Trust, Hidaya Foundation was awarded Sitara-i-Eisaar (Star of Sacrifice) by the Government of Pakistan, in recognition of the results-oriented relief efforts of both the organizations during the 2005 earthquake in Pakistan. It was awarded during a special ceremony held at the Embassy of Pakistan in Washington, DC.

In Keeping with our commitment to the communities in which Hidaya Trust operates, it hires its work force as an equal opportunity employer.  It means that employment decisions are based on merit and business needs and not on race, color, status in the society, ancestry, sex, age, religion, creed and marital status.