How do you pay Zakat this year, or do you refrain from paying it until the house amount is settled, knowing that you have an amount that has reached its due date (hawl) and exceeds the nisab, and you lent a portion of it to your sister, and you have outstanding house installments?

Zakat is obligatory on one who is not in debt to the extent of their wealth. If one is in debt to the extent of their wealth, then there is no zakat on them according to the majority of scholars.

However, if they possess other wealth exceeding their needs that can be used to settle the debt, then they must pay zakat on their wealth.

When zakat becomes obligatory on wealth, then all of it must be paid zakat on, as long as it reaches the nisab and a full year has passed over it. Similarly, zakat is obligatory on money loaned to a sister, because ownership of it is not relinquished by the loan.

As for installments that are not yet due, they are considered like a debt on an insolvent person, and zakat is paid on them for all previous years when they are received.