Full Lecture Transcript (Cleaned)
The Question: Deducting Mortgage from Zakat — 15:30
Brother Hashim from Virginia says that he has a home mortgage that he has to pay off, and he is asking: for the sake of zakat, should he deduct the debt from the amount of his savings to calculate zakat?
A Note on Mortgages — 15:47
With regards to the issue of home mortgages, I have given a much longer lecture — a conversation that I had with Dr. Hatem al-Haj. You can look this up; it is an hour-long conversation. And we concluded that really, mortgages should be avoided unless there is some type of need or strong need or necessity, and there is no Islamic alternative.
Nonetheless, the brother is not asking about that. He is basically saying that he already has a mortgage and he is asking: does he deduct the debt of the mortgage?
The Ruling: No Deduction for Long-Term Debt — 16:34
So suppose the house costs — he still has $250,000 left on it — and of course he might have savings and cash and whatnot come time of zakat. Should he deduct $250,000 from his total quantity that he has in the bank and then give zakat on that?
The response is that no, you do not deduct what is called a long-term debt. You see, the debts that are owed are of two types: immediate short-term, and long-term. Long-term is a debt that it is understood you can pay off in a very lengthy period of time.
Why This Goes Against the Sharia's Goals — 17:00
Those types of debts — and the classic example is in fact the house mortgage — if we were to consider this when we calculate zakat, then for most of us who have a house mortgage, there would never be any zakat for 30 years. And that goes against the goals of the Sharia.
We know that we have to pay $1,500 or $2,000 per month for the mortgage, whatever it might be, and we are earning a good amount more than this. Therefore, by the time the year finishes, we have a savings amount that we have had for a year that we can give zakat on.
Therefore, to answer your question simply: no, you do not deduct the value of the remaining mortgage in order to calculate zakat. And Allah subhanahu wa ta'ala knows best.