Zakah on Land Set Aside for Trade

Question : May Allah keep you steadfast. The questioner asks: What is the ruling on the zakah of land set aside for trade, where the zakah is paid from the monthly salary?

Answer : Land set aside for trade is when a person is one who buys and sells real estate; he buys this plot today and sells it tomorrow. In this case, there is zakah. The method of paying the zakah on it is to estimate its value whenever the zakah becomes due: how much is it worth? Then you pay one-quarter of one-tenth. If he bought this land for trade for one hundred thousand, and at the end of the lunar year it was worth fifty thousand, what is his zakah: zakah on one hundred thousand or on fifty? It is zakah on fifty. And if he bought it for one hundred thousand and at the end of the lunar year it was worth two hundred thousand, does he pay zakah on two hundred thousand or on two hundred thousand? This is the method of paying zakah on land and other real estate. However, if a person has land that was granted to him, or land he bought to develop, and then he decided not to develop it and offered it for sale, or if he has land he bought to preserve his wealth, saying, "If I need it, I will sell it; otherwise, I will keep it," then there is no zakah on any of these, because they are not from the category of trade goods. The one who offers it for sale does so because he has no need for it, or because he is pleased to part with it, or because he needs the money and sells it. Trade goods are those that change hands from time to time according to supply and demand. This is a matter many people ask about, saying, "I was granted land and offered it for sale; is it trade goods?"
The answer is that they are not trade goods, because offering them for sale is not because he trades in land, but because he has no need for them. Likewise, a person who bought land to develop it, then decided not to develop it, and then offered it for sale: here, offering it for sale is not from the category of seeking profit, but from the category that he no longer needs it and wants to sell it. And the person who says, "I preserve my money in land, and if I need it, I will sell it; otherwise, I will keep it," he also has no zakah on this land, because it is not trade goods.