Ruling on exchanging a large piece of land for another that is smaller but closer to the city?

It is permissible to trade
a large piece of land for another that is smaller than it, because land is
not one of riba-type of commodities for which it is required that they be
equal when trading one for another. So there is nothing wrong with
exchanging one piece of land for two others, or a large piece of land for a
small one. 

The riba-type commodities
are mentioned in the hadeeth in which the Prophet (peace and blessings
of Allaah be upon him) said: “Gold for gold, silver for silver, wheat for
wheat, barley for barley, dates for dates, salt for salt, like for like,
same for same, hand to hand. But if these commodities differ, then sell as
you like, as long as it is hand to hand.” Narrated by Muslim (1587). 

To these categories may be
added other commodities that may have the same reason to be included in this
list. 

The reason in the case of
gold and silver is because they are measures of price [i.e., they may be
used as the price for things; in the past the prices of things were reckoned
in gold and silver, or dinars (gold coins) and dirhams (silver coins), so it
would be said: This is worth so much in dinars and so much in dirhams].
Hence currencies are connected to gold and silver. 

The reason with regard to
the other four categories (wheat, barley, dates and salt) is that they are
staple foodstuffs, or because they were measured by volume. Rice may be
added to them by analogy. 

There is a difference of
opinion among the fuqaha’ with regard to the reason why a commodity may be
regarded as being of a riba type, but land does not come under this heading
at all. 

It is proven in Saheeh
al-Bukhaari (2116) that Ibn ‘Umar sold some land to the north of
Madeenah to ‘Uthmaan for some land that was closer to Madeenah. 

Al-Haafiz Ibn Hajar said:
This shows that it is permissible to sell land for land. 

And Allaah knows best.