Off-plan payment plans explained: how to present 60/40, monthly and post-handover plans

An off-plan payment plan splits the price into a down payment at booking, instalments while the building goes up, a payment on handover and, in some plans, instalments after handover. The name usually describes the split: a 60/40 plan asks for 60% before handover and 40% on or after it. To present plans well, show the same unit on two or three plans side by side, with the cash needed at booking, the fees on top of the price and what is left to pay, or to borrow, at handover.

How a plan is built

Whatever its name, every off-plan plan is made of the same parts:

• Down payment on booking, when the client signs the developer's booking form.
• Construction instalments, either on fixed dates, such as every month or quarter, or tied to construction stages, such as 20% or 50% completion.
• Handover payment, due when the developer hands over the keys.
• Post-handover instalments in some plans, spread over a period after handover.

The buyer pays into the project's escrow account, and DLD's FAQ explains the protection behind that: every amount received from buyers of off-plan units is deposited there, and the developer is paid from it as each construction milestone is reported and checked by the escrow trustee's engineer. For an instalment tied to a stage, the buyer can ask for a letter from the project consultant approved by DLD confirming the completion percentage before paying.

The developer's plan, on its price list and in the SPA, is the one that counts. Your proposal explains it; it never replaces it. The steps around the plan, from the EOI to Oqood registration, are in our guide to the off-plan sales process.

Common shapes

These are the shapes you will meet on developers' price lists, and what each one asks of a buyer. Names and splits vary by developer, so read the plan itself, not just its label.

Costs around the price

The price on the plan is not the whole cost. Show these next to it, each on its own line:

• DLD registration fee. Registering the sale in DLD's interim register (Oqood) costs 4% of the sale value. DLD's service page lists 2% for the seller and 2% for the buyer, plus AED 10 knowledge and AED 10 innovation fees. DLD's investor guide says the fee is shared equally unless the parties agree otherwise, so the SPA decides who pays which part. If a launch offer says the developer pays the fee, check the SPA says so too.
• Developer charges. Ask the developer for any administration or processing fees it adds, and get them in writing.
• Mortgage costs. DLD lists the fee for registering a mortgage as 0.25% of the loan. Banks set their own fees on top, so ask the bank for them in writing.
• At handover. DLD's service for issuing the title deed lists AED 250 for the title deed and AED 250 for the map of an apartment or villa, plus the AED 10 knowledge and AED 10 innovation fees. Ask for the expected yearly service charge as well.
• VAT. The Federal Tax Authority zero-rates the first supply of a residential property within three years of its completion, and its real estate guide treats buying a home off-plan from the developer as zero-rated. Later sales of homes are generally exempt, while commercial property carries the standard 5%. Services around the sale, such as an agency's commission, can carry 5% VAT.

Who pays which fee, and when, depends on the developer and the SPA. Write the assumption on the proposal, for example “DLD fee: 4%, paid by the buyer”, so the client can check it against the contract.

A worked example (illustration)

The numbers below are an illustration. “Project X” is a made-up building, the price is invented and the plans are not any developer's offer. They show how to lay three plans side by side for one unit.

A one-bedroom apartment in Project X costs AED 1,500,000, with handover about three years after booking. We assume the SPA puts the whole 4% DLD fee on the buyer, AED 60,000, paid at booking with AED 20 of DLD's knowledge and innovation fees. In a real sale, check the SPA.

Read across the rows and the trade-offs show. The 1% monthly plan needs the most cash at booking but keeps the monthly payment small. The 60/40 plan asks for the least at booking and leaves AED 600,000 for handover. The post-handover plan starts at the same AED 210,020 and spreads AED 600,000 over the two years after handover: workable for an investor who lets the unit, as long as the client knows the title deed comes after the last instalment.

Then add the costs that come later. At handover, the title deed, map and DLD's small fees come to AED 520 for an apartment on DLD's current service page. If the 60/40 buyer borrows the AED 600,000 due at handover, the mortgage registration fee is 0.25% of the loan, AED 1,500, before the bank's own fees.

Mortgages and off-plan

The Central Bank's mortgage regulations set the most a bank may lend against a property's value. For a property bought off-plan the cap is 50%, whatever the buyer's nationality, the value or the purpose, because of the risk to completion. For other homes, the limit depends on who borrows, the property's value and whether it is a first home:

The same regulations cap the term of a mortgage at 25 years and keep a borrower's total debt repayments within 50% of their gross salary and regular income. They measure the loan against the property's appraised value, from an independent valuation, not the price on the plan.

This shapes the plan you propose. A buyer who needs a large loan should look at plans with a large handover payment, which banks may finance once the home is complete, rather than borrowing during construction. Ask early whether the client will borrow, and suggest a bank pre-approval before booking: a plan that works on paper fails if the bank says no at handover.

Presenting two or three options to one client

One plan is a quote; three plans are a choice. A good proposal answers the client's real question, “what do I pay, and when?”, in a minute:

1. Start from the client, not the brochure: the cash they have now, what they can pay each month and whether they will borrow.
2. Pick two or three shapes that fit, for the same unit, so the plan is the only thing that changes.
3. Show dates and amounts in AED, not just percentages, with the DLD fee and other costs on their own lines and the total at the bottom.
4. Mark it as an illustration, with the date of the price list it uses. The developer's documents and the SPA decide the real terms.
5. Send it as a link or a PDF the client can forward to a partner or a bank, and follow up once they have opened it.

Our page on payment plan proposals shows how Propfusion builds this comparison from a project or a sale listing, with the buyer fees and an optional mortgage estimate on each plan.

Two things to avoid: promising a return the developer has not put in writing, and quoting from an old price list. Plans can change between launch phases, so check the date before you send. When the client chooses, the plan carries into the booking; see how an off-plan sales CRM keeps EOIs, bookings and instalments together, and how new projects keep each project's plans on file. Buyers weighing off-plan for the first time can read our guide to off-plan properties in Dubai.