Praise be to Allah.
Can Muslims celebrate Christmas?
There is no doubt that what is mentioned of celebrations is haram, because it is an imitation of the unbelievers. It is well known that the Muslims do not have any festival apart from ‘Eid al-Fitr and ‘Eid al-Adha , and the weekly “‘Eid” which is Friday (Yawm al-Jumu‘ah).
Celebrating any other festival is not allowed and is either of two things: either it is an innovation (bid‘ah), if it is celebrated as a means of drawing close to Allah, such as celebrating the Prophet’s Birthday (Mawlid) ; or it is an imitation of the unbelievers, if it is celebrated as a tradition and not as an act of worship, because introducing innovated festivals is the action of the people of the Book who we are commanded to differ from. So how about if it is a celebration of one of their actual festivals?
Can Muslims decorate their houses at Christmas?
Decorating the house with balloons at Christmas is obviously joining in with the unbelievers and celebrating their festival.
What the Muslim is required to do is not to single out these days for any kind of celebration, decorating or adornment, or special foods, otherwise he will be joining the unbelievers in their festivals, which is something that is undoubtedly haram.
Shaykh Ibn ‘Uthaymin (may Allah have mercy on him) said:
“Similarly it is forbidden for the Muslims to imitate the unbelievers by holding parties on these occasions, or exchanging gifts, or distributing sweets or other foods, or taking time off work and so on, because the Prophet (blessings and peace of Allah be upon him) said: “Whoever imitates a people is one of them.” Shaykh al-Islam Ibn Taymiyah said in his book Iqtida’ al-Sirat al-Mustaqim Mukhalafat Ashab al-Jahim: Imitating them on some of their festivals implies that one is happy with the falsehood they are following, and that could make them (the non-Muslims) take this opportunity to mislead those who are weak in faith.”
Those who do any of these things are sinning, whether they do it to go along with them, or to be friendly towards them, or because they feel too shy (to refuse to join in) or any other reason, because it is a kind of compromising the religion of Allah to please others, and it is a means of lifting the spirits of the unbelievers and making them proud of their religion.” (Fatawa Ibn ‘Uthaymin, 3/44)
Shaykh al-Islam Ibn Taymiyah (may Allah have mercy on him) was asked about a Muslim who makes the food of the Christians on Nawruz (Persian New Year) and on all their occasions such as Epiphany and other feast days, and who sells them things to help them celebrate their festivals. Is it permissible for the Muslims to do any of these things or not?
“Praise be to Allah. It is not permissible for the Muslims to imitate them in any way that is unique to their festivals, whether it be food, clothes, bathing, lighting fires or refraining from usual work or worship, and so on. And it is not permissible to give a feast or to exchange gifts or to sell things that help them to celebrate their festivals or to let children and others play the games that are played on their festivals, or to adorn oneself or put up decorations.
In general, (Muslims) are not allowed to single out the festivals of the unbelievers for any of these rituals or customs. Rather the day of their festivals is just an ordinary day for the Muslims, and they should not single it out for any activity that is part of what the unbelievers do on these days.” (Al-Fatawa al-Kubra, 2/487; Majmu‘ al-Fatawa, 25/329
And Allaah knows best.