From works budget to the total cost of the project

A client who compares their spending ceiling with the price of the works alone finds the difference when there is no margin left. The items outside the building contract (contratto d'appalto) are not marginal: some are required by law, others are imposed by the Comune (the municipality) or by the network operators, others again depend on the client's own choices.

Total cost reads as a sum of lines with different origins. Each line has someone who invoices it, a moment when its amount stops being an estimate and a source from which its value is drawn. Keeping them separate shows, at every stage, which part of the budget is already certain and which is still exposed.

This page gives no costs per square metre, fee percentages or tax rates. For the weight of individual components in construction cost, a good starting point is the construction cost breakdown.

Ten items cover nearly every project undertaken by a private client, the committente. Not all are present in every case, but each should at least be excluded in writing.

The works line stays mobile even after the contract. Variations, price revision and the contractor's claims (riserve) change its amount: they are dealt with in the branch on the final cost during the works.

The works budget should be written net of tax, with the tax on a line of its own. The applicable regime depends on the nature of the works and on the client's position, and can differ between new build and work on an existing building: it should be checked with the client's tax adviser before closing the budget, not after the first invoice arrives.

Design, works direction (direzione dei lavori) and the final inspection (collaudo) are separate appointments, even when the same professional carries them out. Fee scales for the regulated professions have been abolished (Decree-Law 1/2012, D.L. 1/2012, art. 9, para. 1) and the professional must present a written outline quote for the fee (art. 9, para. 4): the client therefore has a written amount for each appointment at the time of signing. The useful clauses are covered in the article in this branch on the budget in the design appointment.

When more than one contractor is expected on site, the client must appoint the safety coordinators, and their cost goes into the budget. Art. 90 of Legislative Decree 81/2008 (D.Lgs. 81/2008), on the duties of the client or of the responsabile dei lavori (the client's works manager for safety), distinguishes two moments.

The duty depends first and foremost on the number of contractors, not on the size of the site. A client who thinks they will save money by awarding the works to several separate firms triggers safety coordination, with its cost: the choice is discussed in the article on general contractor or separate trades. Nor does the para. 11 exception remove coordination: it moves the CSP's duties to the CSE.

The contributo di costruzione (development contribution) is owed to the Comune according to the building permit and the type of works. It becomes certain when the permit is issued or becomes effective, but its order of magnitude should be estimated beforehand, with the designer, from the municipal tables. Conditions, calculation and exemptions are covered in the article on the development contribution; only one thing matters here: the contribution does not appear in the contractor's quote.

Utility connections and surveys are the items most often forgotten, because they depend neither on the contractor nor on the designer. The network operator's quote arrives after the request, sometimes when the design is well advanced. Surveys of the ground or of the existing building, by contrast, are worth bringing forward: they cost little compared with the uncertainty they remove, and they reduce the contingency needed for the unforeseen in the ground and in existing structures.

Kitchens, fitted furniture, curtains, home automation or the garden can stay outside the building contract, but not outside the budget. They should be listed as lines of their own, because the client orders them directly and is solely responsible for their timing and for any interference with the works.

The contingency is the only item that does not correspond to an invoice. It is the client's choice, and it shrinks as the design and the works progress. How to size it stage by stage is covered in the article on how much to set aside for contingencies.

If the project is financed, interest, arrangement fees and guarantees are part of the total cost. Their amount also depends on how long the works last: a delay costs twice, in the works and in the financing.

Tax incentives do not reduce the budget to be financed. Deductions apply after the expenditure and only to eligible items, within the set limits: which expenses qualify is explained in the article on eligible expenditure for tax deductions. In the budget the expenditure should be written in full, with the expected benefit on a separate, cautious line.

The budget stabilises in steps, and at each step some items move from estimated to certain. Reading the budget in this way tells the client where the risk still lies.

The practical consequence is simple: the contingency must be higher while the works line is still an estimate. A budget that shows the same contingency before design and at contract signature has not taken account of what has become certain in the meantime.

The stazione appaltante (the contracting authority) works with a tool the private client can borrow: the quadro economico (the cost framework). Annex I.7 to Legislative Decree 36/2023, art. 5, para. 1, distinguishes within it, among other things, works measured or lump-sum, safety costs not subject to discount and somme a disposizione (sums held at the authority's disposal), including contingencies, allowances for modifications, professional fees, inspections and VAT.

For a private client the cost framework is not an obligation, it is a checklist. Running through its items before closing the budget helps avoid forgetting anything, even though many public lines have no private equivalent. Its full make-up is explained in the article on the project cost framework.