Dr.Monzer Kahf, a prominent economist and counsellor states: “If a Muslim has assets and properties, then they live rich by their use and virtue, and such Muslim cannot claim that they are poor just because they might have a long-term loan on their residence or other assets. We must realize that having for instance; plots (investment land that you are rich by owning), jewellery, bank account, stocks and share in companies, makes us a rich person. Don’t we live rich with all these properties? How do we then reconcile these two sides of the issues together?

Here is the solution: On the day of Zakah, and after the Hawalan of Hawl, all those assets that are going to be used to pay any part of the long-term loan is deductible from the total that is subject to Zakah, that much can be considered as assigned for loan payment and therefore it is not subject to Zakah.

On the other hand, the part of the long term loan that is not going to be paid from assets existing on the day of Zakah, but rather from future incomes and revenues cannot be deducted from the riches one has on hand now.”