When is buying a large house considered extravagance?
Question

My wife insists that we must buy a big house with a garden and swimming pool. While I insist on living in a small house (3 bedrooms for example) without the extra luxuries such as a garden and swimming pool. What is the solution for this problem? I cannot force her to be ascetic. We must live together and I know that her wanting to live a luxurious life is not an enough justification for divorce, but I do not want to live just for the pleasure of this world. What shall I do? If I buy a big house as my wife wishes, will I be rewarded? Bearing to mind that I do not mind living in a small house; I do not need but a ceiling that conceals my family and me. Will I be considered of those who Allah says about them: “You received your good things in the life of the world, and you took your pleasure therein.
Praise be to Allah.Firstly: 
The Muslim should not make this world his main concern, and poverty is not what the Prophet (peace and blessings of Allaah be upon him) feared for his ummah, rather he feared that the world would open up to them and they would compete in worldly gain, for that could lead to their doom and destruction. 
It was narrated that ‘Amr ibn ‘Awf (may Allaah be pleased with him) said: The Prophet (peace and blessings of Allaah be upon him) said: “By Allaah, it is not poverty that I fear for you, rather what I fear for you is that worldly riches may be given to you as they were given to those who came before you, and you will compete for them with one another as they competed with one another, and you will be destroyed as they were destroyed.”
Narrated by al-Bukhaari (2988) and Muslim (2961). 
Al-Haafiz Ibn Hajar (may Allaah have mercy on him) said concerning the lessons learned from this hadeeth: 
Competition in worldly gains may lead to destruction of religious commitment. 
Fath al-Baari (6/263). 
And he said: 
Ibn Battaal said: This shows that the one to whom the delights of this world open up should beware of their bad consequences and the evil of their temptation, and he should not be at ease with its adornments or compete with others for them. 
Fath al-Baari (11/245). 
The one who is distracted from the Hereafter by worldly pursuits is a loser, for this world is but play and there is nothing lasting or perfect in it; the Hereafter is better and more lasting. Allaah has likened this world to the plants which grow and flourish, then they soon become straw scattered by the wind; there is nothing lasting for man in this world, hence he must make the Hereafter his goal. 
Allaah says (interpretation of the meaning): 
“Know that the life of this world is only play and amusement, pomp and mutual boasting among you, and rivalry in respect of wealth and children. (It is) as the likeness of vegetation after rain, thereof the growth is pleasing to the tiller; afterwards it dries up and you see it turning yellow; then it becomes straw. But in the Hereafter (there is) a severe torment (for the disbelievers ___evildoers), and (there is) forgiveness from Allaah and (His) Good Pleasure (for the believers __ good‑doers). And the life of this world is only a deceiving enjoyment”
[al-Hadeed 57:20] 
“And put forward to them the example of the life of this world: it is like the water (rain) which We send down from the sky, and the vegetation of the earth mingles with it, and becomes fresh and green. But (later) it becomes dry and broken pieces, which the winds scatter. And Allaah is Able to do everything.
46. Wealth and children are the adornment of the life of this world. But the good righteous deeds that last, are better with your Lord for rewards and better in respect of hope”
[al-Kahf 18:45, 46]
Secondly: 
One of the signs that people may be destroyed by their competing in worldly gains is their buying houses with riba-based loans. A person exposes himself to the wrath and anger of Allaah for the sake of competing with others in building a house and in decorating it and making it spacious, but they may be among those who used up all their good things in this world, because they did that which Allaah has forbidden for the sake of pleasure and enjoyment. As for the one who builds or buys a house with halaal wealth and enjoys it, he is not included among these people. 
We have stated that it is haraam to buy houses through riba-based banks in the answers to questions no. 2128, 21914 and 22905. 
Thirdly: 
Hence we know that there is no reward in building a house per se, otherwise the rich who build palaces for millions would occupy the highest degrees of Paradise! The dinar that a Muslim spends on building his house will not be reciprocated in the Hereafter. A man may be free of sin, and if he is rewarded it will be only for his intention in protecting his family and household from indignity, and sheltering them in a house that protects their dignity and honour. But there is no reward merely for building a house, and he may be exposed to sin and punishment if he is extravagant and his aim is to show off and boast. 
The scholars of the Standing Committee quoted a number of ahaadeeth which criticize building, after which they said: 
With regard to these ahaadeeth and other similar reports, some of them are saheeh, some are hasan and some are not sound. Those of them which are regarded as sound are to be understood as criticizing the one who does that to show off and as an act of extravagance. This varies from one situation, person, place and time to another. It is proven in Saheeh Muslim in the hadeeth of ‘Umar ibn al-Khattaab (may Allaah have mercy on him) that the Prophet (peace and blessings of Allaah be upon him) said, when Jibreel asked him about the signs of the Hour: “When you see the barefoot, naked, destitute shepherds competing in the construction of lofty buildings.” Ibn Rajab said, commenting on this hadeeth: What is meant is that the lowest of the people will become their leaders, and their wealth will increase, until they compete in building tall buildings, and adorning them. Al-Nawawi mentioned the same meaning in Sharh Saheeh Muslim, where he discussed this hadeeth. 
With regard to making a building tall for a legitimate purpose, such as to provide facilities and accommodation for the needy, or as a means of earning money, or because one has a lot of dependents and the like, there is nothing wrong with that as far as we can see, because things are to be judged by their purpose. The Prophet (peace and blessings of Allaah be upon him) said: “Actions are but by intention, and every man will have but that which he intended.” This hadeeth was narrated by al-Bukhaari and Muslim in their Saheehs from ‘Umar (may Allaah be pleased with him). 
Shaykh ‘Abd al-Razzaaq ‘Afeefi, Shaykh ‘Abd-Allaah ibn Ghadyaan, Shaykh ‘Abd-Allaah ibn Munay’ 
Fataawa al-Lajnah al-Daa’imah (4/490). 
Shaykh Muhammad ibn Saalih al-‘Uthaymeen (may Allaah have mercy on him) was asked: 
We have been told that every deed of the son of Adam will be rewarded except building a house. Is this correct? If it is correct, what is the reason? Please mention the hadeeth in which it was narrated. May Allaah reward you with good. 
He replied: 
Yes, this was narrated concerning a man who spent his money extravagantly on mud, i.e., in building that which he had no need for. As for building that which a person needs, it is one of the necessities of life, and if a person spends on himself for the necessities of life, he will be rewarded for that if he spends it seeking thereby the Countenance of Allaah, may He be glorified and exalted. But showing off and competing in constructing tall buildings is something in which there is nothing good, rather it is nothing but a waste of money. As for that which a person builds because he needs it, he will be rewarded for that, if he seeks thereby the Countenance of Allaah, because the Prophet (peace and blessings of Allaah be upon him) said to Sa’d ibn Abi Waqqaas: “Know that you will never spend anything seeking thereby the Countenance of Allaah, but you will be rewarded for it, even (the food) that you put in your wife’s mouth.” 
Al-Liqa’ al-Shahri (15/question no. 6). 
See also the ahaadeeth and comments of the scholars concerning this issue in the answer to question no. 21658. 
Fourthly: 
Hence you may know the ruling on building the house that your wife wants you to buy for them, and we will sum that up for you in the following points: 
1.It is not permissible to buy a house with money from haraam sources such as riba-based loans or wealth that was unlawfully seized.
2. There is no reward for simply building a house, but if the owner intends to shelter his family and protect them from heat and cold, he will be rewarded for his intention, not just for the house itself.
3.It is not permissible for a Muslim to build or buy a house with the intention of boasting and showing off, and if he does that then he is sinning.
4.There is no reason why the house should not have a pool or garden, but that is subject to the condition that it should not be extravagance or going to extremes with regard to the size and price of the house. A spacious house is a joy to its owner.
It was narrated that Sa’d ibn Abi Waqqaas said: The Messenger of Allaah (peace and blessings of Allaah be upon him) said: “There are four things that are essential for happiness: a righteous wife, a spacious home, a good neighbour and a sound means of transportation. And there are four things that make one miserable: a bad neighbour, a bad wife, a small house and a bad means of transportation.”
Narrated by Ibn Hibbaan in his Saheeh (1232) and classed as saheeh by al-Albaani in al-Silsilah al-Saheehah (282) and Saheeh al-Targheeb (1914). 
Al-Manaawi (may Allaah have mercy on him) said:  
“a spacious home” means: it is very comfortable for its inhabitants, in which case its spaciousness varies from one person to another, because what is spacious for one may be small for another, and vice versa. 
Fayd al-Qadeer (3/302). 
5.Determining whether or not the costs of building or purchasing count as extravagance depends on the person’s situation. If a man’s wealth is 100 million riyals, for example, then it is not regarded as extravagance – let alone squandering – if he builds or buys a house  for 2 million riyals. But if a man’s wealth comes only from his salary that he takes every month, then it is regarded as extravagance if he oversteps the limit in building or buying a house.
The one who is extravagant with regard to houses is the one who goes beyond the usual limit, and adds extra floors or rooms unnecessarily. The one who squanders is the one who builds unnecessarily or spends his money carelessly on construction. 
Shaykh Muhammad ibn Saalih al-‘Uthaymeen (may Allaah have mercy on him) was asked: 
A man bought a house for two million riyals, then he furnished it for six hundred thousand. After that he bought a car for three hundred thousand riyals. Is this man regarded as extravagant and a squanderer? What is the ruling on buying expensive items for decorating houses? Please advise us, may Allaah reward you with good. 
He replied: 
Extravagance is that which oversteps the limit. Allaah, may He be exalted, has stated in His Book that He does not love the extravagant. If we say that extravagance is overstepping the limit, then extravagance varies. A thing may be extravagance in the case of one person, but not in the case of another. This man who bought a house for two million riyals, and furnished it for six hundred thousand, and bought a car – if he is rich then it is not extravagance, because this is easy for those who are very rich. But if he is not rich, then he is regarded as extravagant, whether he is of moderate means or he is poor, because some poor people want to look good, so they buy these huge mansions and furnish them lavishly, and they may borrow money from people for that, and this is wrong. 
So the three categories of people are: 
(i)a rich man who is very well off, so we say that if he – at present times, but we do not say that it applies in all times – buys a house for two million riyals, and furnishes it for six hundred thousand, and buys a car, then he is not being extravagant.
(ii)A man of moderate means; in his case it is regarded as extravagance.
(iii)A poor man. In his case it is regarded as foolishness, because how can he take out a loan to make himself look good with something that he has no need of?!
Liqaa’aat al-Baab al-Maftooh (107/question no. 4) 
And Allaah knows best.