The complete chain
On the example of a project with a PEM of €1,000,000:
| Level | Construction | Example amount |
|---|---|---|
| PEM (presupuesto de ejecución material, direct works budget) | Sum of the work items at unit prices, with site indirect costs embedded | €1,000,000 |
| Contract budget (PEC) | PEM plus overheads (13 % convention) and industrial profit (6 % convention) | €1,190,000 |
| Contract with VAT | VAT at the applicable rate (10 % for housing, 21 % general) | €1,309,000 (housing) |
| Complete construction cost | Adds professional fees (8 – 12 % of PEM), permits and ICIO tax (3 – 5 %), utility connections, insurance and inspection | ≈ €1,500,000 |
| Total development cost | Adds land, management, marketing and financing costs | Depending on the operation |
Fee, charge and insurance percentages vary with the type of works, the municipality and the scope contracted; those in the example are usual orders of magnitude in building construction. The mnemonic rule that summarises the chain: the PEM usually represents between 65 and 75 % of the complete construction cost excluding land.
What lives inside the PEM
The PEM is built by chapters and work items, each with its quantity and its broken-down unit price (materials, labour, machinery and indirect costs). Two practical consequences. First: site indirect costs are already inside the PEM, distributed across the prices; adding them again when comparing offers is a frequent mistake, developed in indirect costs and overheads. Second: two PEMs are only comparable at equal quantities and specified quality; the final amount says nothing without its quantities.
The checks before comparing two figures
Four questions resolve the vast majority of flawed comparisons. Which level of the chain does each figure describe? On which definition of floor area is it rated (built, usable, chargeable)? From which year is it and with which index is it updated? Which physical scope does it cover (with or without external works, with or without basements, with or without activity equipment)? When the four answers match, the comparison is legitimate; when any differs, the difference in figures measures the difference in scopes, not in efficiency.
The essentials
The chain PEM → contract budget (+19 % by convention) → complete construction cost (fees, permits, insurance) → total development cost (land and operation costs) is the skeleton of every Spanish budget. Mastering the usual percentages allows any level to be rebuilt from another and, above all, allows refusing to compare figures from different levels. It is the natural complement to this guide's typology ranges, all expressed in PEM precisely to offer a homogeneous base.
Note: indicative percentages and conventions for Spain in 2026; the specific regime of each contract and municipality prevails.