Ustadh Tabraze Azam is asked how to calculate zakat on advance rent.
My zakat will be due soon. In the following situation would you please kindly inform me on whether I would pay zakat on the full rent and deposit or not?
I renewed my tenancy last week for another six months and, as before, because I’m not in employment I have to pay the full amount upfront plus the security deposit, which they already have from when I started renting.
Rent: £675/mo. Six months total: £4,050. Security Deposit: £800.
Last year I did as I was unsure. It would be helpful to know what the actual ruling on this would be. I pray you will advise me please.
Wassalam
No, you do not need to pay zakat on the rent you have paid your landlord for your home.
The principle is that zakat is paid on assets owned. As you have paid your rent up front, the money has left your ownership, and it is thus no longer included in your zakat calculations.
As for the security deposit, you would include it in your zakatable assets. This is because it is merely a deposit, and you aren’t transferring ownership of that money to the landlord.
Note that if you are in possession of the zakatable minimum (nisab) and you then proceed to pay zakat which you think is due, when it actually isn’t, you can consider that amount to count towards a future payment of zakat. Hence, if you unduly paid extra last year, you can assume it was forwarded to this year.
Please also see Is Your Zakat Due? – A Reader and Resources on Giving Zakat.
And Allah Most High knows best.
Wassalam,
Tabraze Azam
Checked and approved by Shaykh Faraz Rabbani.