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Is there Zakat on a tenancy deposit?

Answered according to Hanafi Fiqh by Darulfiqh.com

Question:

Is there Zakat on a tenancy deposit?

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

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Answer:

Deposits on assured shorthold tenancies (AST’s) must be protected with a government approved scheme. Under the Housing Act 2004 the landlord or agent must protect the deposit and issue prescribed information to the tenant within 30 days of receiving it.
A tenancy deposit is a sum of money which a landlord requires a tenant to pay at the start of the tenancy or which the landlord holds over from a previous tenancy with the same tenant. The money is security in case the tenant does not meet their obligations in connection with the tenancy[1].

Zakat is not binding on a security deposit as it is not in the possession of the tenant – neither constructively nor physically[2].

And Allah Ta’ālā Alone Knows Best

Mufti Faraz Adam 
www.darulfiqh.com
 
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[1] https://www.tenancydepositscheme.com/landlords-FAQs.html

[2]  (قَوْلُهُ: وَلَا فِي مَرْهُونٍ) أَيْ لَا عَلَى الْمُرْتَهِنِ لِعَدَمِ مِلْكِ الرَّقَبَةِ وَلَا عَلَى الرَّاهِنِ لِعَدَمِ الْيَدِ، وَإِذَا اسْتَرَدَّهُ الرَّاهِنُ لَا يُزَكِّي عَنْ السِّنِينَ الْمَاضِيَةِ، وَهُوَ مَعْنَى قَوْلِ الشَّارِحِ بَعْدَ قَبْضِهِ، وَيَدُلُّ عَلَيْهِ قَوْلُ الْبَحْرِ وَمِنْ مَوَانِعِ الْوُجُوبِ الرَّهْنُ ح وَظَاهِرُهُ وَلَوْ كَانَ الرَّهْنُ أَزْيَدَ مِنْ الدَّيْنِ ط. (حاشية ابن عابدين ج 2 ص 263 ط أيج أيم سعيد)

This answer was collected from DarulFiqh.com, which is operated under the supervision of Mufti Faraz ibn Adam al-Mahmudi, the student of world renowned Mufti Ebrahim Desai (Hafizahullah).

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