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Fatwa CenterAllaah has permitted trading and forbidden Ribaa
Question
I want to know from you about the Islamic ruling regarding the business of dealing in Real estate and land. My father who retired from the service last year invested all money he got from his employer as retirement benefit in land and when the price of that land increases largely he sold that land and purchases the new piece of land and carries on like that. Also in our area the prices of any type of land has never fallen. And keeping in view of this I want to know if it is allowed to do this business knowing that there is no chance of loss as price always keeping on rising and never falls.
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.
There is no harm in purchasing land and selling it with a profit, this is a permissible sale. This is included in the Saying of Allaah (which means): {Allaah has permitted trading and forbidden Ribaa (usury or interest).}[Quran 2:275]. It should be noted that you should pay Zakat on this land if it reaches the minimum amount liable for Zakat and a whole lunar year elapses on the capital money with which this land is purchased.
Allaah Knows best.
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