Zakat on Off-Plan and Under-Construction Property: Buying to Live In vs. to Resell

Off-plan or under-construction property bought to live in is not zakatable. If it was bought to resell, zakat is due on the portion you have already paid for, valued at today’s market price, according to a fatwa from Darul Ifta Birmingham, a Hanafi fatwa service. Installments due within the coming year can be deducted; longer-term installments cannot.

Reviewed by Hafiz Maqsood Ahmed.

The question matters most in markets built on pre-construction sales. Off-plan deals made up 62.6 percent of property transactions in Dubai in 2025, and the Dubai Land Department recorded 134,623 off-plan sales worth 293 billion dirhams (about $80 billion), according to a 2025 market report by the property portal Bayut. Many of those buyers are investors planning to sell before or soon after completion. The positions below are those of named bodies; The Halal Times does not issue rulings. Our guide to zakat explains the general rules.

The intention test

Islamic scholars classify property by why it was bought. Britain’s National Zakat Foundation (NZF) says property bought “with the express intent to resell” is zakatable on its value, while a home for personal use or a property held as a long-term investment is not. The same test applies before a building is finished.

How to calculate zakat on an off-plan property bought to resell

Darul Ifta Birmingham’s fatwa, approved by Mufti Mohammed Tosir Miah and updated in May 2026, sets out the method in its ruling on off-plan property:

1. Work out the share of the property you own: the amount paid divided by the full price.
2. Apply that share to the property’s current market value.
3. Deduct installments that fall due within the next year. Long-term installments “cannot be deducted.”
4. Add the result to your other zakatable wealth and pay 2.5 percent if the total exceeds the nisab.

The fatwa’s example: A buyer has paid 20 percent of a 1,000,000-dirham unit. The owned share is 200,000 dirhams, and zakat on it is 5,000 dirhams (about $1,360). If the market value has risen since purchase, the share is valued at the higher current price.

Building your own home

For a house being built for the owner’s own use, the structure is not zakatable, just as a finished home is not. Cash set aside for construction remains the owner’s money until it is paid to the builder. NZF’s scholars treat savings for a future house as zakatable, as explained in our guide to zakat on your house and house savings.

When the intention changes

Intentions change. A buyer who planned to live in an apartment may decide to sell it, or an investor may decide to keep a unit and rent it out. Scholars generally treat property as trade goods only while the owner intends to sell it, so the zakat status follows the current intention on the zakat date. A buyer who keeps a completed unit and lets it pays zakat on the rent instead; our guide to zakat on rental income covers that case.

Summary

• Off-plan home for personal use: no zakat.
• Off-plan investment to rent out: no zakat on the property.
• Off-plan unit to flip: zakat on the paid-up share at market value, minus installments due within a year.
• Cash held for construction or future installments: zakatable until paid.