Zakah on money that is set aside for buying a house
Question

My husband and I are employed and since I started working, I started to save a small portion of my salary with the aim of buying a house. Up till now, fifteen years later, I have not been able to save half the amount of money needed to buy a house, because of the high cost of living and the high costs of real estate in major cities. My question is: how should I pay zakah, even if that will affect the amount of money?.
Praise be to Allah.If a person owns the nisaab (minimum amount of wealth at which zakah becomes due) and one full hijri year has passed since he acquired it, then he must pay zakah on it, even if he has set that money aside to build a house or get married or go for Hajj and so on, because of the general meaning of the evidence which states that paying zakah on wealth is obligatory. 
The nisaab for cash is the equivalent of 595 grams of silver, and the rate that must be given is 2.5%, i.e., one quarter of one tenth. 
zakah has been enjoined by Allah in order to purify wealth, make it grow and bring blessing, and to help the poor and needy. It is a great obligation and it is not permissible to neglect it, for wealth belongs to Allah and He is the One Who has enjoined zakah and has warned against neglecting it. Allah says (interpretation of the meaning): 
“And perform As-Salaah (Iqaamat-as-Salaah), and give zakah, and bow down (or submit yourselves with obedience to Allah) along with Ar‑Raaki‘oon” [al-Baqarah 2:43] 
“Take Sadaqah (alms) from their wealth in order to purify them and sanctify them with it, and invoke Allah for them. Verily, your invocations are a source of security for them; and Allah is All-Hearer, All-Knower” [al-Tawbah 9:103]
“And those who hoard up gold and silver (Al‑Kanz: the money, the zakah of which has not been paid) and spend them not in the way of Allah, announce unto them a painful torment” [al-Tawbah 9:34]
Kanz refers to all kinds of wealth that is subject to zakah but on which zakah has not been paid. 
Muslim (987) narrated that Abu Hurayrah (may Allah be pleased with him) said: The Messenger of Allah (peace and blessings of Allah be upon him) said: “There is no owner of gold or silver who does not pay what is due on them, but when the Day of Resurrection comes, there will be beaten out for him plates of fire which will be heated in the Fire of Hell, and his sides, forehead and back will be branded with them. Every time they cool down they will be reheated for him, on a day the length of which is as fifty thousand years, until judgement is passed among the people. Then he will be shown his path, either to Paradise or to Hell.” 
The Prophet (peace and blessings of Allah be upon him) told us that wealth does not in fact decrease because of zakah, rather it is blessed and increases. He said: “Wealth does not decrease because of charity.” Narrated by Muslim, 2588. 
Many people neglect the issue of blessing on wealth. A person may own huge amounts of wealth but it is not enough for him, and it does not bring him what he wants; he does not feel any sense of ease or happiness because of it. But someone else may own a small amount of wealth that has been blessed for him, so he is happy and content with it. This is something that is well known. 
So do not hesitate to pay zakah on your wealth, and do that willingly and cheerfully. Remember that the pleasure of Allah is what we are seeking, and this world is transient and passing, and a pleasure that will soon fade. 
“The life of this world is only the enjoyment of deception (a deceiving thing)” [Aal ‘Imraan 3:185]
Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) said: What the Muslim should do is pay his zakah in full, in obedience to Allah and His Messenger (peace and blessings of Allah be upon him), fulfilling the pillars of Islam and protecting himself from punishment and protecting his wealth from loss and being deprived of blessing. zakah is a bounty, not a penalty. Allah says (interpretation of the meaning):  
“Take Sadaqah (alms) from their wealth in order to purify them and sanctify them with it, and invoke Allah for them. Verily, your invocations are a source of security for them; and Allah is All-Hearer, All-Knower” [al-Tawbah 9:103]
The one to whom Allah has given wealth must work out the zakah precisely. 
Wealth is of three kinds: 
1 – Wealth on which zakah is definitely due, such as cash in gold and silver or the notes and bills that have taken their place. zakah is due on this whether it is set aside for trade, spending, buying a house to live in or a dowry with which to get married, etc. 
2 – Wealth on which zakah is definitely not due, such as the house in which one lives, the car which one drives, the furnishings of one’s house, and so on.  
These two matters are clear. 
3 – Kinds of wealth concerning which there is some difference of opinion, such as debts that are still owed. What you should do is ask the scholars about this so that you will understand your religious duties and worship Allah properly. 
It is not permissible for a Muslim to be careless about the matter of zakah, or to be lazy about giving it to those who are entitled to it, because of the stern warning concerning that which is mentioned in the Book of Allah and the Sunnah of His Messenger (peace and blessings of Allah be upon him)."(Majmoo’ Fataawa al-Shaykh Ibn ‘Uthaymeen, 18/299)
May Allah help us and you to do that which He loves and which pleases him. 
And Allah knows best.