What is the applicable Zakat rate when one purchases land or palm trees for trade, and they yield produce or fruit after a full Hawl (year)?
Chapter on Zakat on Trade Merchandise
Al-Mughni
Book of Zakat
Primary text
If land or palm trees are purchased for trade, and the land is cultivated or the trees bear fruit, reaching a stage of maturity (badw al-salah) and hardening of the grain/fruit precisely upon the completion of the Hawl, and the value of the land and trees alone meets the Nisab (threshold) for trade capital, then the fruit and grain are subject to Zakat at the rate of one-tenth (Ushr), and the entire entity (land, trees, and produce) is subject to Zakat based on its value. This is the position of Abu Hanifa and Abu Thur.
Supporting text
Al-Qadi and his school hold that the entire entity is subject only to Zakat based on its value (Zakat al-Qimah), as it is treated as trade capital, similar to livestock designated for trade (Saimah). The evidence presented for the main ruling is that Zakat al-Ushr is more beneficial for the poor than Zakat al-Qimah (which is one-quarter of Ushr, or one-fortieth of value), thus the more beneficial rate must be prioritized. Furthermore, the cause for the full due amount (Ushr) has been established.