Practical Law Glossary Item 7-551-2105 (Approx. 2 pages)
Glossary
Hard Costs
In the context of a construction budget, the direct costs incurred by an owner for the physical construction of the project, including labor, material, tools, and equipment. Hard costs generally include all visual improvements and tangible assets incorporated into the project.
Hard costs commonly also include:
Site preparation.
Grading.
Excavation.
Landscaping.
Furniture and fixtures.
Specialized mechanical, electrical, and technology systems.
In contrast, soft costs are indirect costs associated with the project development that are not directly related to the physical construction.