How Is Zakât Calculated on Rental Property and Income?
(There is more extensive discussion on pp. 41-45.) Zakât is assessed for rental property on growth only. The fixed asset itself is exempted from Zakât, which is calculated at 2.5 percent of net income after all expenses are deducted for the Zakât year. Fixed Assets are not themselves income generating but help other assets generate income or produce. So store fixtures, computers, tables, even buildings or machinery that are not generating income but merely housing or running one’s business are all Zakât -exempt. Exploited Assets are possessions obtained, not for resale, but to generate income and to provide benefit to their owners. These include assets rented for profit, such as residential buildings, means of transportation, and anything rented out for profit. Rental businesses (equipment, cars, etc.) pay Zakât on (1) the wholesale value of all rental assets (considered trading goods) at 2.5 percent; and (2) on net income at 2.5 percent (There is an alternative calculation method (see
