Paying After Handover: How It Works

Post-handover payment plans allow buyers to pay part of the purchase price after they receive their keys, often over two to five years. They have become popular as developers compete for buyers, and they can make ownership more accessible.

How it works

• A portion of the price is paid during construction.
• The buyer receives the keys at completion.
• The remaining balance is paid in instalments over an agreed period.

Advantages

Buyers can move in or rent the property while still paying, using rental income to cover part of the instalments. Less capital is needed during construction.

Risks

Buyers remain committed to payments after handover, even if rents fall or their circumstances change. Title may not be fully transferred until the balance is paid.

Questions to ask

• When is the title deed issued?
• What happens if a payment is missed?
• Can the property be sold before the balance is paid?
• Is interest or a premium included in the price?

Comparing with mortgages

Post-handover plans are often interest-free in name but may be reflected in a higher price. Buyers should compare total costs with mortgage financing.

Using rent to cover instalments

Many buyers on post-handover plans expect rental income to cover part or all of their instalments. This can work, but it depends on realistic assumptions. Rents in a newly completed community may be lower than expected, as many units compete for tenants at the same time. The property may take several months to let, and furnishing or fit-out costs may be needed first. Service charges begin once the unit is handed over. Buyers should calculate whether they can meet instalments if the property is empty for some months or lets at a lower rent than hoped. Those who can comfortably cover payments from income without relying on rent are in a much safer position.

Our view

Post-handover plans can be useful when buyers understand the terms and can meet the payments. We help clients compare options and avoid unexpected obligations.