Are Finished Basements Included in Square Footage?

As part of your house, you may assume the basement is part of the home’s square footage. However, this is not always true, as basements must meet specific criteria to add their area to a home’s total square footage.

The “are basements included in square footage” question can cause a lot of confusion for a potential homebuyer. You want your new home to have enough space to meet your lifestyle needs, but will you get a mortgage if the appraiser excludes the basement in assessing the home’s value?

According to Fannie Mae, a basement cannot count as square footage even when finished. To count as gross living area (GLA), an area of the home must be livable, finished, and fully above grade. Finished and livable basements won’t count as square footage since they’re not above grade.

Let’s break down when a basement is considered part of a home’s square footage.


Does my basement count toward the total square footage of the house?

Although there are a few exceptions, basements are rarely considered when determining a home’s gross living area (GLA). This also applies to barndominiums with basements.

The square footage of a home has an impact on the valuation and financing of a property. Thus, both buyers and sellers must understand this matter thoroughly.

A finished basement that improves the usable living space may make it seem logical to think it will count toward a home’s gross living area and square footage. 

When does a basement count toward the square footage?

A home’s overall square footage only includes spaces that are above grade. The areas included in a home’s square footage are typically those located above ground. 

For instance, Fannie Mae has stringent rules on what parts of a house can be included in the gross living area or the actual square footage. Only fully finished above-grade areas of the house are considered in the calculation.

Furthermore, the finished basement will not be included in the computation of the gross living area, even if some of it is below grade. The entire level must be above grade for that room to be included in the official square footage. 

This usually means that the whole level will be removed from the computation of the home’s square footage if any part of the basement is below grade.

When does a basement NOT count toward the square footage?

Even finished basements with egress windows are frequently not included in a home’s square footage calculation. Does the size of a finished basement count?

Even if your finished basement complies with all local laws and regulations and has egress windows, it is unlikely to count toward the total square footage of your house. 

The quality of the finishes is less significant (when deciding whether or not a basement can be put into the equation) than whether or not the room is below grade.

Though a finished basement might not be considered part of the total square footage of your house, egress windows or escape pathways are nonetheless required by law for below-grade living spaces.

Basements that are unfinished and unheated do not count toward the square footage of a house.

In addition, a basement needs to be finished to count toward a house’s square footage. This necessitates that the basement utilizes the same heating and cooling system as the rest of the house. Using portable heating or cooling units or space heaters to heat the basement does not meet this criterion.

Does the basement affect the value of my home?

The advantages of completing a basement are numerous. While it may not count as square footage, the additional livable area will still contribute to increasing the desirability of your house to potential purchasers. 

It may also raise the value of your property, unlike commercial real estate, which is solely appraised on square footage.

There are ways to highlight the work done in your basement when you advertise your house for sale without including its area in the home’s legal square footage. 

For instance, you may emphasize the room’s size and potential uses for the future owners; perhaps it would be ideal as a playroom, home office, or movie room. 

Be careful to highlight any “invisible” improvements you’ve made, such as painting the basement steps, waterproofing the basement walls, and installing a sump pump in the listing.

Lastly, don’t forget to include pictures of your lower-level room because you want potential buyers to see themselves using it.

Frequently Asked Questions

Why are finished basements not included in square footage?

Finished basements aren’t included in square footage since they’re not usable. For a space to be considered a living space, it has to meet height clearances, have windows, and be heated.

What is included in the square footage of a house?

The square footage of a home includes a space in a home that has heating, walls, a floor, and a ceiling.

Does a walkout basement count as square footage in Michigan?

Only fully above grade space will count as square footage in Michigan.

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