Have you ever heard about the Islamic term “Waqf” and wondered what it means? In this post, we will learn about what Waqf is and its types.
What is Waqf?
Waqf means endowment when you translate the term from Arabic. According to Shariah, a Waqf is the dedication of a property, a Sadaqah Jariyyah (ongoing charity) by a person from his/her wealth. Waqf can be in the form of property or cash for pious, religious, or charitable purposes.
Once you dedicate the property as a Waqf, it no longer belongs to anyone. From that time on, the property ownership belongs to Allah, letting it be used for charity.
You can not use Waqf for commercial purposes or inherited by someone. Though you have to sell the property, you must replace it with a similar property which needs to be confirmed as Waqf.
For example, Waqf can be a building, land, or other belongings such as a carpet or desk, which you can give away as Waqf to the mosque.
Types of waqf
1. Cash Waqf
A cash Waqf is where the underlying Waqf asset is cash. This is usually as seed capital and a holding mechanism.
2. Corporate Waqf
Corporate Waqf is a new type of Waqf where Waqf assets are in corporate shares of a company. Different corporate bodies such as Islamic banks, takaful companies, Shariah-compliant investment companies usually issue and manage Waqf.
3. Property Waqf
Property Waqf is where an underlying asset such as schools, hospitals, and mosques are donated.
4. Family Waqf
Family Waqf is the Waqf in which the income or usufruct is reserved for specifically described persons, usually family members and relatives.
5. Charitable Waqf
Waqf can be charitable when you dedicate some amount of income or usufruct for a charitable purpose.
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