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Khums (Property Sale)

Q:

I have recently sold my only home and the profit released is less than the value of money I have invested in the home over may past years- am i still liable to pay khums on the amount released or can i honestly say this was what was owed to me for all these years on financial input into my home?

A:

Salaam Alaykum,

There is no khums payable on the profit from your principal place of residence, as it was not an investment and is within your required needs (unless of course it is of a standard higher than your status or position, for example if you buy a house in Mayfair when in fact you can not afford a house other than in Kent Street then khums is payable as this house is above your status).

Khums is payable if the proceeds of sale remains in your hands for >12 months and only the portion that was not khumsed in the past. The financial input you put in to the house was general expenditure and has been spent as a living expense.

S.L. Al-Hakim