The eminent Muslim scholar, Sheikh Yusuf Al-Qaradawi, states: “The purchased land can be categorized as one of two types. The first type is purchased for resale after a period for profit. This type of purchase is a trade transaction and the land in this case is considered a commercial commodity. The land should be appraised annually to determine its value and then Zakah is paid at a rate of 2.5% of that value. This is the opinion of the majority of scholars. Only the followers of Imam Malik have a different opinion. They hold that the land is not subject to Zakah unless it is actually sold. The Zakah is 2.5% of the amount a person receives when the property is sold. The majority of scholars, however, consider this land as wealth and it is then subject to Zakah. This opinion is the most appropriate.
It is noteworthy that we can agree with the Maliki opinion in some circumstances, such as at times of economic depression or market stagnation. One may purchase a piece of land and then the price goes down to a point that very little would be paid for it. In this case, we may consider the Maaliki opinion.
The second type is a land that is purchased to build on and not for resale. In this case, it is not subject to Zakah unless the owner has actually built on the land and rents out the property. Then, he should pay Zakah on the revenue derived from the rent.”