Do I pay Zakat on my sports car?

E-Nisab.com is a great site, and one that I frequently refer to. Today I noticed that they had posted this on their twitter account:

The link provided refers back to Darul Fiqh’s site, where Maulana Faraz ibn Adam responds (referencing Rad al-Muhtar):

Any personal belonging for personal use such as a house, car, refrigerator and the like are not subject to zakāt. Even if it is surplus to requirements, zakāt is not due on such an item. Thus, there is no zakāt due on the sports car in reference.[i]

I would just add that one caveat to this general fatwa is that if and when a person using luxury items for the storage of value as a means to Zakat evasion, then these items become zakatable as well. During the time of Omar (May Allah be pleased with him) people purchased horses and slaves and claimed an exemption from Zakat due to texts negating any zakat liability on slaves and horses. Omar looked past the letter of the law, and held them liable for zakat.

What was his legalistic reasoning for doing so?

Don’t see what you’re looking for here? Try our Zakat page for more information.

About Joe Bradford

About Joe Bradford

Joe is a structuring advisor for a major real estate development firm, specializing in Shariah compliant investment vehicles. He runs a financial advisory. He is the founder of Muslim Money Guide and also blogs at joebradford.net.

comments

  1. Candice

    I was actually asking myself a very similar question today because I heard someone say it had to be paid each year on everything that is included in a person’s net worth (like house)… And I was thinking that for it to be paid over and over again on the same item sounded simply wrong, and that I doubted having to pay it at all on items such as a house.
    It would make sense though to have to pay zakat on things that are bought that are not only beyond requirements for living like a horse, but beyond personal use like multiple horses. Sounds like Umar made the right call in not taking things literally but instead focusing on the meaning behind it.

    1. Salman_Merchant

      Yeah but how is “beyond requirements” established? I can say I only need a 1985 Honda to get by, but I drive a car that is much newer. My newer car costs about $10,000 but I don’t pay Zakat on that. By which method am I establishing necessity?

      In this day in age, would we say that anything above the median purchase price is luxury? I’m not clear on the legal reasoning for going beyond the literal reading of the hadeeth other than to say it was a decision to give God what is rightfully his beyond a subjective line.

      1. User Joe Post author

        Beyond requirements refers to a person need for transportation customary for a person like themself or better. Here we don’t look to the type of vehicle but to whether or not the need is met. So if i have a car, my need is met. If i go buy another, not to fulfill this need (regardless of the quality) but to make my zakat liable cash illiquid for evasion purposes, in this instance I still owe zakat, because of trying to circumvent the law.

  2. shazeea

    Salam,

    Because it’s tax evasion. It’s extra money that normally would have been taxable that is used to purchase things that are then not taxable. It happens now all the time.

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