Zakat on Rental Property

Short answer: Not on the flat's value — zakat falls on the accumulated rent money. On your zakat day, whatever rent savings (combined with your other cash) stand above nisab are zakated at 2.5%. Details: A rented property is a productive fixed asset, like a craftsman's tools or a hired-out vehicle; the asset itself is exempt while its income follows the rules of cash. Advance rent counts as cash once received. What remains after expenses (repairs, taxes) enters the reckoning. Should you ever hold the property for resale trade, from that day it becomes trade goods zakatable at market value. Evidence: Sahih al-Bukhari 1464 (exemption of use-assets); Sahih al-Bukhari 1454 (zakat on money); Ibn Majah 1792 (hawl); the fatwas of Ibn Baz, al-Uthaymin and the Permanent Committee that rental property owes zakat only on its saved rent. Application: Simplest method — on your annual zakat day count everything in bank/cash including rent; no separate hawl per month's rent. For complex individual cases, consult a qualified scholar.