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Is Investing in a Pre-Construction Condo Halal?

30 August, 2026
Q I have been living in Scarborough (Ontario, Canada) for the last five years. I came here as a student and have now become a permanent resident. I do have a question. I am planning to invest in a pre-construction condo, which will be ready to move into in 3 years, in sha Allah. My plan is to invest there and sell it once it’s ready to occupy. I want to take that equity from the condo and use it as a down payment for my future home. Am I allowed to do this? I know the consequences of interest and want to be clear about this, please. Given this country and scenario, am I allowed to do this? Also, is life insurance halal? I have had life insurance for the last two years. It includes critical illness as well. Is it permissible? Please advise.

Answer

Prof. Dr. Monzer Kahf
30 August, 2026

In the Name of Allah, Most Gracious, Most Merciful. 

All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.

In this fatwa:

Investing in a pre-construction condo is permissible in principle if the investment avoids Riba (interest) and Haram products or activities. Any applicable Zakah should also be paid according to Islamic rules.

Responding to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:

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Investment in housing and other businesses is always permissible as long as you avoid interest (= Riba, which is prohibited in the Qur’an) and Haram products. Remember that all such investments are subject to Zakah, which is due every lunar year and should be given to the poor and needy.

All insurances are controversial, and there is an alternative in some countries called Takaful, or Islamic insurance. But unfortunately, it does not exist in Canada. However, if insurance is required by law, such as car insurance, or if one feels it is necessary for him/her, it is okay to take it. This applies to life and other kinds of insurance.

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Almighty Allah knows best.