Answered by Ustadh Tabraze Azam
Zakat and Long Term Debts
Question: I have an Islamic mortgage for $150,000 over a period of 25 years, plus, a loan from a family member amounting to $100,000. Currently, I have at hand $10,000 in savings. I am repaying $1900 per month to cover the outstanding debt. I wish to know how much Zakat is owed if any.
Answer: Wa alaikum assalam wa rahmatullahi wa barakatuh,
I pray that you are in the best of health and faith, insha’Allah.
If one has long terms debts, it would be permitted to deduct up to a year’s worth of repayments, and not the entire debt.
As such, one would:  calculate all of one’s zakatable assets — gold, silver, cash/savings, money lent out, trade goods, stocks, and so on — and  deduct one’s debts and immediate expenses (up to a month). Thereafter, if one was in possession of the zakatable minimum (nisab), it would be obligatory to pay zakat.
[Ibn `Abidin, Radd al-Muhtar; Kasani, Badai` al-Sanai`]
Please see: Zakat: How to Calculate and Who to Give It to
And Allah alone gives success.
Checked & Approved by Faraz Rabbani