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Fatwa CenterZakat on money held to pay contractor
Question
I live in USA, and last year I bought a piece of land overseas in Morocco. I hired a contractor builder to build me a house. The total amount the contractor asked for is $12000. We agreed that I will be giving him around $1000 every month. He said that the house will be ready in about 4 months. I have been sending the money to my father-in-law so that he can pay the contractor builder as we agreed. My father-in-law gave the contractor so far about $2000. After 2 months we learned that he contactor didn't start building the house yet. I told my father-in-law to stop giving the money to the contractor until he starts building the house. About a month ago we learned that the contractor has started building my house. I have sent about $9000 to my father-in-law since last year to give to the contractor. The contractor told my father-in-law not to pay him until he finishes the house. I told my father-in-law to give all the money to the contractor when the house is finished. My question is: It has been exactly one year since I started sending money to my father-in-law to give to the contractor as agreed. Since the money was kept with my father-in-law and was not given to the contractor, and my intention was that the money I am sending is for the contractor and not for anything else, do I need to pay Zakaat on this money since one year had elapsed?
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.
Since the money is still in your possession and one year had elapsed and the money is beyond the minimum amount liable for Zakat, then Zakat of 2.5% has to be paid on this amount of money. As regards the money that has already been paid to the contractor, it is an obligation on the contractor to pay the Zakat on this money as it became in his possession. So if a whole year elapses, the contractor has to pay Zakat on it.
Allaah knows best.
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