In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
In principle it is permissible to sell any commodity on different prices for cash and credit. The extra amount payed due to the installments will not be Riba.
It is permissible to buy land on installments.
And Allah Ta’āla Knows Best
اللباب في شرح الكتاب - (1 / 241)
ويجوز البيع بثمن حال ومؤجل إذا كان الأجل معلوما
Introduction to Islamic Finance pg 76
"......They say that if a seller determines two different pricesfor cash and credit sales, the price of the credit sale being higher than the cash price, it is allowed in Shari‘ah. The only condition is that at the time of actual sale, one of the two options must be determined, leaving no ambiguity in the nature of the transaction. For example, it is allowed for the seller, at the time of bargaining, to say topurchaser, “If you purchase the commodity on cash payment, the price would be Rs. 100/- and if you purchase it on a credit of six months, the price would be Rs. 110/-.” But the purchaser shall have to select either of the two options. He should say that he would purchase it on credit for Rs. 110/-. Thus, at the time of actual sale, the price will be known to both parties.
However, if either of the two options is not determined in specific terms, the sale will not be valid. This may happen in those installment sales in which differentprices are claimed for different maturities. In this case the seller draws a schedule of prices according to schedule of payment. For example, Rs. 1000/- are charged for the credit of 3 months Rs. 1100/- for the credit of 6 months, Rs. 1200/- for 9 month and so on. The purchaser takes the commodity without specifying the option he will exercise, on the assumption that he will pay the price in future according to his convenience. This transaction is not valid, because the time of payment, as well as the price, is not determined. But if he chooses one of this options specificallyand says, for example, that he purchases the commodity on 6 months credit with a price of 1100/- the sale will be valid. Another point must be noted here. What has been allowed above is that the price of the commodity in a credit sale is fixed at more than the cash price. But if the sale has taken place at cash price, and the seller has imposed a condition that in case of late payment, he will charge 10% per annum as a penalty or as interest, this is totally prohibited; because what is being charged is not a part of the price; it is an interest charged on a debt.
The practical difference between the two situations is that where the additional amount is a part of the price, it may be charged on a one time basis only. If the purchaser fails to pay it on time, the seller cannot charge another additional amount. The price will remain the same without any addition. Conversely, where the additional amount is not a part of the price it will keep increasing with the period of default. "