Last edited 10 Nov 2020

Types of costs for buildings

The idea of ‘cost’ in relation to buildings is not a simple one, as there are a wide range of different types of cost. This article provides a brief summary of those types, with links to sources of additional information.


[edit] Capital cost

Capital costs are those costs associated with one-off expenditure on the acquisition, construction or enhancement of significant fixed assets including land, buildings and equipment that will be of use or benefit for more than one financial year.

[edit] Construction costs

Construction costs are those costs incurred by the actual construction works themselves, and on some projects may be determined by the value of the contract with the main contractor.

For more information see: Capital costs.

[edit] Building operating costs

Building operating costs are the costs incurred gy the day-to-day operation of the building, which might include; utilities costs, maintenance and repairs, general and administrative expenses and so on.

[edit] Business operating costs

Business operating costs may include building operating costs and also other operating costs such as; rent, wages and so on.

[edit] Life cycle costs

Life cycle costing is an economic assessment of the discounted net present value of life cycle costs, carried out using profiles of current and future costs and benefits. There is increasing emphasis on life cycle costing to ensure all costs are taken into account during the decision-making process, not just those for capital investment.

For more information see: Life cycle costing.

[edit] Whole life costs

Whole life cost. Whole-life costs consider all costs associated with the life of a building, from inception to construction, occupation and operation and disposal.

For more information see: Whole life costs.

[edit] Out-turn costs

Generally this refers to the actual, total construction cost calculated at the end of the project, but it may also refer to the cost of a specific contract, or to costs incurred over a defined period. This contrasts with cost estimates, or target costs, which are calculations of the cost that is expected, or the cost that should be achieved.

For more information see: Out-turn cost.

[edit] Other types of costs

Other aspects of cost might include environmental cost, social cost and so on.

[edit] Find out more

[edit] Related articles on Designing Buildings Wiki

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