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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.

The 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
 
DISCLAIMER:
The views and opinions expressed in this answer belong only to the author and do not in any way represent or reflect the views of any institutions to which he may be affiliated.
Arguments and ideas propounded in this answer are based on the juristic interpretations and reasoning of the author. Given that contemporary issues and interpretations of contemporary issues are subjective in nature, another Mufti may reach different conclusions to the one expressed by the author. Whilst every effort has been taken to ensure total accuracy and soundness from a Shari’ah perspective, the author is open to any correction or juristic guidance. On the event of any juristic shortcomings, the author will retract any or all of the conclusions expressed within this answer.
The Shari’ah ruling given herein is based specifically on the scenario in question.  The author bears no responsibility towards any party that acts or does not act on this answer and is exempted from any and all forms of loss or damage.  This answer may not be used as evidence in any court of law without prior written consent from the author.  Consideration is only given and is restricted to the specific links provided, the author does not endorse nor approve of any other content the website may contain.


[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)

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