Khums: Selling a Car Bought Without Paying Khums — What Part of the Proceeds Is Liable?

Practical Laws of Islam as per the teachings of Imam Khamenei

Khums: Selling a Car Bought Without Paying Khums — What Part of the Proceeds Is Liable?

English:

Question #883:

I bought a car several years ago, and at the present time it might sell for a price several times more than what it was purchased for. As khums was not paid on the money spent to buy it, and I am planning to buy with its proceeds a house to live in, does khums apply to the entire amount once I receive it, or does it apply only to the money that I paid to buy the car while the balance, that is, the difference of the sale value over the original price of the car, is considered as part of the earnings of the year in which the car is sold and as a result is subject to khums if the money is not spent on living expenses by the end of the khums year?

Answer #883:

If the car was a part of your ma’ūnah and purchased spending the income of the same khums year for personal use, there is no khums on its proceeds. But in case you bought the car spending the income of the same khums year to be used for work, you owe khums on its value at the end of the first khums year after you take the devaluation of money into consideration. However, the increase in its value during the next years - after subtracting the inflation - will be counted as the income of the year of sale and is subject to khums unless it is spent on living expenses by the end of khums year..

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Khums