Zakaat on Rental Deposits

Q. A tenant is moving into a flat. The tenant has paid a deposit for the flat. Who has to pay Zakaah on the deposit given for the flat? The tenant or the landlord?

A. In terms of paying Zakaat on rental deposits, there are commonly two scenarios that apply:

1. If a tenant has given a landlord a non-refundable deposit towards the tenant’s rental of the flat, the deposit belongs to the landlord. In that case, it is the responsibility of the landlord to pay any Zakaat due on the deposit.
2. If a tenant has given a landlord a refundable deposit that is redeemed by the tenant at the termination of the tenancy, then although the deposit is held by the landlord, the deposit belongs to the tenant. In that case, it is the responsibility of the tenant to add the deposit amount to his/her wealth and pay any Zakaat due on the deposit.

Allah Ta’ala Knows Best

Mufti Ismaeel Bassa

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