Zakat on property reserve funds

Egypt's Dar Al-Ifta

Zakat on property reserve funds


We live in a residential building comprising 131 apartments. Each apartment owner has contributed 1000 EGP towards the property's reserve fund which is invested in an interest-bearing account. Owners pay monthly premiums of 30 EGP to cover regular building expenses. The deposited sum, 125, 000 EGP, has remained constant over the years without any decrease. Is zakat due on this fund?


Scholars have generally agreed that among the conditions obligating zakat is full ownership of property i.e. exclusive right to dispose of the property and exclusive right to interest. Scholars stated that zakat is not due upon money designated for a public benefit such as money endowed to benefit the poor, mosques, military campaigns or orphans since this money has no specific owner. Based on this principle, any property without a specific owner is considered public property that is not zakatable. Examples include properties administered and invested by the government on behalf of the community as these belong to the Public Treasury.

The ruling
Based on the above, zakat is not due on the mentioned reserve fund since it is not exclusively owned by a single person but is a public entity—its owners may change though the fund itself is retained.
Allah the Almighty knows best.

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