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Zakaah and mortgage payment

Fatwaa ID: 2164

As-salam alaykum respected mufti Sahib,
If a person has a mortgage payment for his house, which means he is in debt, does he still need to pay zakah? His wife has a little bit of gold that was gifted to her when she got married.

In the Name of Allaah, the Most Gracious, the Most Merciful.
As-salaamu ‘alaykum wa-rahmatullaahi wa-barakaatuh.

At the outset, a conventional mortgage is haraam. A person wages war against Allaah Ta’aala and His Messenger ﷺ. His life will definitely be filled with regret and remorse and it will be void of barakah. Sincere tawbah and istighfaar must be made and every attempt should be made to come out of such shackles. He may consider refinancing with a Shari’ah compliant Islamic financing.

Nevertheless, a long term debt like the above is not fully deductible when assessing zakaah liability or eligibility. Only that amount which is payable from the loan itself in the next twelve lunar months are deductible. It is worth noting that many contemporary scholars opine that only one month’s of payment is deductible. The interest amount will not be deductible at all.

Thus, in the enquired situation, the person will add together all his zakaatable assets which includes cash at hand, savings, bank balances, most investments, gold, silver, crypto, spare change, etc. He will then deduct the loan principal payable in the next twelve months. Loan interest, insurance and taxes will not be deducted. If the total after the deduction is equal to or more than the nisaab amount, then he will pay 2.5% of the total as zakaah. If the total after deduction is less than the nisaab, then he will not have to pay zakaah this year.

It should be noted that zakaah is an individual obligation. The zakaah of the husband and the zakaah of the wife are separate. They will not join their wealth to assess zakaah liability. They will assess their wealth separately and pay zakaah based on their own wealth. The wife’s gold or other zakaatable assets will not make a difference to the husband’s assessment.

And Allaah Ta’aala knows best.
Mufti Muajul I. Chowdhury
Darul Iftaa New York

08/12/1445 AH – 02/22/2024 CE | AML1-9828

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين


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