Is Advance received from tenants is to be treated as debt which is to be returned when they leave the property?
Mu' meneen Brothers and Sisters,
As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)
One of our brothers/sisters has asked this question:
Is Advance received from tenants is to be treated as debt which is to be returned when they leave the property? If so while calculating zakath on our income or savings which remained for one year do we need to deduct the above amount? Pls answer.
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Advance rent zakah determination
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If the total net worth of any believer (man, woman, or child) is more than the prescribed nisaab of 7.5 tolas of gold (app. 85 grams or app. Value US$2,100.00), then the person is liable to pay the obligatory annual zakah of 2.5% on their excess wealth which has been in their possession for a full calendar year.
If the total net worth of any believer is less than the prescribed nisaab, he/she is not liable to pay any zakah until their net worth exceeds the prescribed nisaab.
For the purpose of determining zakah, the Net Excess Assets would be the current market value of all of ones assets (properties, investments, jewelry, cash, etc.) except:
- the value of the house one owns and actually lives in
- the value of the car/vehicle one uses on a regular basis
- the value of the furniture and fixtures one uses on a regular basis.
Your Question: Is Advance received from tenants is to be treated as debt which is to be returned when they leave the property?
Firstly, the annual zakah is not determined from the annual income or rent of the premises; but rather the owner of the premises will be liable to pay his zakah on the market value of the property.
Secondly, it all depends what exactly is meant by advance received..if it is merely a deposit which has to be returned back to the tenant when they vacate the premises, then the tenant will be considered the inherent owner of that wealth and it is they who would be liable to pay its zakah.
But if by advance received you mean to imply that it is the rent of the premises owned by you which the tenant has paid in advance.then indeed you would be the owner of this wealth, and if that wealth has been in your possession for a period of one year, you indeed would be liable to pay its zakah.
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Your brother and well wisher in Islam,