Can You Include A Finished Basement To Your Home’s Square Footage?

If you’ve finished your basement and you’re wondering if you can count it as square footage, here is a good explanation of the process. Let’s say the basement is finished with proper windows, a walkout, bedroom, and a full bath…

Basic/safe rule of thumb: You can generally count the square footage in your listing information IF it is recognized by your county assessor’s office. Here’s how to make sure that happens:

Ideally, you have done your improvement work with permits and you’ve “finalized” your permits. If so, your local jurisdiction may have already forwarded the information from your work – the number of added square feet, added bedrooms, bathrooms, and total rooms – to the county assessor’s office. Sometimes your local permit-issuing agency does not forward this information, or is very slow getting it to the county assessor, so the information is incorrect on county records when you you look it up before sale. In this case, in most jurisdictions, you need only get proof that you got permits and “finalized” them (from your local permit-issuing agency), bring this to the county assessor, and ask them to update their records to match the records from your local permit-issuing agency.

I’d let the county fiddle with things like whether or not to count 50% or 100% of square footage if a basement improvement is below grade – unless you feel the work has been improperly recorded, and you want to be sure all the rules were applied correctly in the calculation of the new square footage.

If you DIDN’T get permits for your work, you can try to get the work permitted after the fact. A few issues can come up: (1) If you made changes that would not otherwise be permitted because you violated planning regulations, that can be a mess. In this case, you can still go through a review process to try for planning approvals, but it can be dicey and you can fail. (2) You may be asked to open up your walls to show an inspector that all work is up to code, and to correct any non-code-compliant work. (3) You will be asked to pay for the permits you’re pulling, of course, and many jurisdictions penalize people for getting permits after the fact.

Penalties are sometimes equal to the permit amounts. (4) Once you get the permit situation settled, you may still need to go through the county assessor update process, described above.

One tip: If you didn’t get permits for the work and you want those permits and that formal recognition now, go to the Planning and Building departments and ask some general questions so you get the lay of the land and know what challenges may be in your path BEFORE you give anyone your actual address. If someone gets your address and hears that you’ve done work illegally, they may feel compelled to start chasing you to force you to get permits or tear the work apart.

If your work does not qualify for permits (i.e., is prohibited under the zoning ordinance), you probably want to know this before you let the city folks know where you live and where they should start sending the nasty letters about your “illegal addition”.

Your local jurisdiction (permit-issuing agency – either your local city or county) sometimes does not forward this information, or is very slow in getting it to the county assessor, so that the information may be incorrect on county records when you bring your home onto the market. In this case, in most jurisdictions, you need only get proof that you (a) did the work with permits, (b) “finaled” the permits, and (c) added X square feet, Y bedrooms, Z bathrooms… If it’s easy to do, you may want to bring the plans in to the county assessor’s office to show the addition. Your local permit-issuing agency can give you the information to show the county assessor, including copies of “finaled” permits and/or proof that your addition was given its certificate of occupancy. You bring this to your local county assessor’s office, and ask them to update their records to match the records from your permit-issuing agency.

Let the county fiddle with things like whether or not to count 50% or 100% of square footage if a basement improvement is below grade. That shouldn’t be something you need to worry about unless you feel the work has been improperly recorded, and you want to be sure all the rules were applied correctly in the calculation of the new square footage.

By: Lucy Armentrout – Real Estate Agent

From Gary Hall – Appraiser: As a Real Estate Appraiser, we generally do not include basements in the gross living area.  This is because they are “Below Grade.”  They are part of the gross building area, however, typical buyers do not consider them at the same contributory value as the rest of the home.  This is not to say they do not have contributory value as many basements, garage conversions, finished attic, or additions can actually have considerable contributory value.