Answer
Wa `alaykum as-salamu wa rahmatullahi wa barakatuh.
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
In this fatwa
- Agricultural land is exempt from zakah, but its products are subject to 5-10% zakah.
- Non-agricultural land used as residence is exempt.
- Land used as a wealth item is subject to zakah.
In his response to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:
Conditions of Zakah
The criterion of zakah is whether you are rich or not. If he or she has an amount of money that reaches that nisab (zakatable amount), he/she has to pay the due zakah for this amount according to the kind of possession he owns.
Suppose a business not only did not make income but made losses, but it is still above the nisab? The answer is YES, of course, and every year.
Zakah on land with no Income
If you are rich being an owner of these two lots of land that you do not need them for your actual living, then they are subject to zakah regardless of what people may say or claim. It is a property that you own and it makes you rich, it is a money for you and Allah said that money is subject to zakah. We read in the Quran what means:
{Take, [O, Muhammad], from their wealth a charity by which you purify them and cause them increase, and invoke [ Allah ‘s blessings] upon them. Indeed, your invocations are reassurance for them. And Allah is Hearing and Knowing.} (At-Tawbah 9:103)
Coming to details, the land used in agriculture is exempt from zakah. Agriculture products are subject to zakah at the rate of 5% or 10%. If it is not agricultural, it is then either used for your residence (then it is exempt too), or an item of your wealth then it is subject to zakah.
Allah almighty knows best.