Firstly: The poor and needy to whom it is permissible to give zakaah are those who do not have sufficient to spend on themselves and their families. If your brother has accommodation that is sufficient for him and his children, then he has to sell the foundations of that house, and spend the proceeds on himself and his children. If he cannot sell it, then it is permissible to give him zakaah for his maintenance and accommodation, but he should not be given zakaah to complete the building of this house, because the poor person should only be given zakaah in order to meet his needs, and your brother’s need for accommodation can be met without building this house, such as by renting a house that is suitable for him.
Giving zakaah to relatives who are entitled to it is better than giving it to people who are not your relatives, because charity given to a relative is both charity and upholding of the ties of kinship. But if these relatives are among those on whom you are obliged to spend, then it is not permissible to give them the zakaah of your wealth, and you are obliged to spend on them.
See the answer to question no. 20278.
Shaykh Muhammad al-Saalih al-‘Uthaymeen said:
The more closely a person who is entitled to zakaah is related to you, the more he takes priority over others, because your charity given to a relative is both charity and upholding of the ties of kinship. So it is permissible to give your zakaah to someone who is related to you, subject to the condition that you are not obliged to spend on him. If you are obliged to spend on him, then you must spend on him, and it is not permissible for you to give your zakaah to him.
If it so happens that you have a brother from whom no one will inherit except you, and you are rich and are able to spend on him, and he is poor, then it is not permissible for you to give him your zakaah, because what is obligatory for you is to spend on him from your wealth. But if this brother is poor and has children, then it is permissible for you to give him your zakaah, because due to his having children it is not obligatory for you to spend on him, because you are not his heir.
Jumu’ah khutbah (al-Majmoo’ah al-Saabi’ah).
Shaykh Muhammad al-Saalih al-‘Uthaymeen (may Allaah have mercy on him) was asked:
What is the ruling on giving zakaah to relatives?
The basic principle with regard to that is that it is not permissible for a person to give zakaah to any relative on whom he is obliged to spend if that will be a means of not spending on him. But if he is not obliged to spend on this relative – such as a brother, if the brother has sons and he is not obliged to spend on his brother because he is not his heir as the brother has sons – then in this case it is permissible to give zakaah to the brother, if he is entitled to zakaah. Similarly, if a person has relatives who did not need zakaah for their maintenance, but they have debts, it is permissible to pay off their debts, even if that relative is a father, son, daughter or mother, so long as the debt that they owe is not due to his negligence in spending on their maintenance.
Majmoo’ Fataawa Ibn ‘Uthaymeen, 18/414
And Allaah knows best.