Soft unfinished dye to have in (5)
I believe the answer is:
downy
'soft' is the definition.
(similar in meaning)
'unfinished dye to have in' is the wordplay.
'unfinished' means to remove the last letter.
'to have' becomes 'own' (to have something is to own it).
'in' is an insertion indicator.
'dye' with its last letter taken away is 'dy'.
'dy' placed around 'own' is 'DOWNY'.
(Other definitions for downy that I've seen before include "Feathery" , "Fluffy" .)