Zakat on Inherited Property That Hasn’t Been Sold or Distributed

Heirs do not owe zakat on an inheritance that has not yet come into their possession, according to Islamic Relief Worldwide. Inherited land or houses are not zakatable simply because they were inherited, Britain’s National Zakat Foundation (NZF) says; zakat applies to inherited cash, gold and other zakatable assets once an heir actually owns and controls them.

Reviewed by Hafiz Maqsood Ahmed.

Estates often take months or years to settle, especially when property must be sold and divided among several heirs, so the question of who owes zakat in the meantime is common. The positions below are those of named bodies; The Halal Times does not issue rulings. The general conditions for zakat, including full ownership and a year of holding, are explained in our guide to zakat.

Before the estate is distributed

Islamic Relief Worldwide lists “an inheritance share that you are due but has not come into your possession” among items on which zakat is not due, in its zakat FAQ. The reasoning follows the general condition that zakat applies only to wealth a person fully owns and can use. NZF also leaves inheritance out of the “strong debts” it treats as zakatable while still owed.

The estate itself must first settle the deceased person’s debts. The Assembly of Muslim Jurists of America (AMJA) has said that zakat a person was unable to pay becomes a debt that should be recorded in the will, which places it among the obligations heirs and executors deal with before dividing the estate.

Inherited land and houses

“Zakat is not due on the land if you have simply inherited or purchased it with no particular intention,” NZF says in its guidance on property. The same applies to a house: an heir who lives in an inherited home, or keeps it, owes no zakat on its value. If it is rented out, zakat falls on rental income once received.

NZF treats land bought for investment differently, as zakatable each year on its approximate sale price, because it was acquired with the intention of profit. Whether an heir who later decides to sell an inherited property should treat it as trade goods is a point on which scholars differ, and heirs in that position can ask a qualified scholar. Our guide to zakat on your house and house savings explains how intention shapes the rules for property.

When the sale proceeds arrive

Once an inherited property is sold and an heir receives a share of the cash, that money becomes part of the heir’s wealth. It counts on the heir’s zakat date along with savings, gold and investments, subject to the nisab and the conditions of each school on how long wealth must be held.

Property held for resale at death

If the deceased was a property trader and the estate holds units bought for resale, the status of that stock once it passes to heirs depends on their intention and their school of law. For off-plan units bought to flip, see our guide to zakat on off-plan and under-construction property.