What Does Having a Finished Basement Mean? 

Your ultimate goal when selecting your new home was to choose one with a basement you could finish. You think you’ve found a basement with potential, but what exactly will it take for the basement to count as finished?

A finished basement includes finished walls and floors, a level ceiling, a usable staircase or entrance, heat, and an electrical system. The look of a finished basement varies depending on your design preferences.

In today’s informative guide, we’ll answer all your questions about finished basements, such as what features they have, if you can live in a finished basement, and whether it’s worth it to finish your basement. 

Let’s get started!   

This Is What It Means to Have a Finished Basement

A finished basement is more than a cold, uninsulated space with concrete walls and floors. It features the following characteristics that set it apart.

List of items that a finished basement have... 1. finished walls 2. finished floors 3. leveled ceilings 4. usable stairway or entrance 5.heat 6. electrical system

Finished Walls

Finished walls have a decorative and protective layer that covers or even replaces the original wall.

The walls may now include features such as wiring, piping, ductwork, and insulation, but that depends on how much you’re willing to pay for a finished basement. 

Finished walls vary in appearance. They may have a smooth or textured finish and be made of a multitude of materials, from tile to brick, marble, and more. 

The walls can be wallpapered, painted, or left bare in the case of appealing marble, brick, or tile. This gives the finished walls more personality. 

Finished Floors

The floor that you walk on when in your basement will also not be hard concrete if it’s considered finished.

Finished floors are sometimes referred to as floor coverings. These may not be the only layer of floor–as you’re unlikely to rip up perfectly good concrete–but will be the topmost layer.

Like a finished wall can be made of an extensive variety of materials, the same rule applies to finished floors. 

Some floors may have a smooth vinyl finish or could be finished with tile, laminate, or wood planks if you have a more significant budget. 

You can also get wall-to-wall carpeting installed or throw down a couple of rugs.

Finished floors don’t only add to the ambiance of your finished basement but also provide a softer, warmer place for the feet compared to the original concrete floors.  

Level Ceilings

A finished basement will also have level ceilings. 

This simply means that from one corner of the basement to the other, the ceilings–no matter what they’re made of–are the same height. 

Basements don’t always have level ceilings by default depending on the design and layout of the area. This can detract from the look of the space. 

Usable Stairway or Entrance

A finished basement needs an accessible set of stairs leading down to the basement. 

These usually aren’t rickety stairs made of painted wood planks and a long wooden railing that can give you splinters if you glide your hand down it when descending. 

Rather, a finished basement will have an upscale staircase like what you’d see on the main floor leading up to the second floor of your home. 

The stairs are stable, secure, and safe. They may feature carpeting or non-slip hard materials so that kids, adults, and pets alike can go up and down the basement stairs without fearing for their wellbeing.

If not a set of stairs, then a finished basement must have an accessible entrance such as a back storm door.

The condition of the door should also be excellent. The door should feature a lock and possibly a deadbolt as well.

Some basements have both a staircase and an access door. Both would need sprucing up for the basement to be considered finished. 


It’s not common for a basement to get cold due to its location in the home, but you know how freezing cold a basement can feel in the winter. It’s even worse if your basement is uninsulated. 

That’s why it’s required for a finished basement to have some form of heat, such as in the form of a heater, a furnace, or a ductless mini split heat pump. 

 If the finished walls have insulation, then the heat that pipes through the basement will linger longer so it will be a comfortable place to spend time in. 

Electrical System

The last feature of a finished basement is an electrical system. 

This is a complex addition but usually not one that has to be installed for a basement to be considered finished.

After all, all but the most rudimentary unfinished basements have electric. 

You might use the basement electricity to power a mini fridge, a washer, and a dryer. You also use the lights down there.

For a basement to qualify as finished, you might opt to upgrade the electrical, expanding upon what’s already there rather than starting over from scratch. 

This way, if you wish to furnish the finished basement with lamps, skylights, televisions, and other electronics, you can without worrying about pulling too much power and possibly causing an outage. 

Is a Finished Basement Considered Livable Space?

Your basement has some components that would render it finished, but not enough that the whole space qualifies. You’re now thinking more seriously than ever about finishing the entire basement.

If you do, does your basement now count as livable space?

It can! 

Law Insider states that one definition of livable space is as follows: “areas in a dwelling unit that are living space. This does not include closets, crawl spaces, and other storage areas.”

Technically, since you’re no longer using your basement for storage (if you ever were), a finished basement would meet the definition above for livable space.

Here’s another definition of livable space per Law Insider: “the climate-controlled area within a Dwelling used for living, sleeping, eating or cooking purposes and excluding such areas as closets, garages, attics, and utility spaces.”

A finished basement practically meets the criteria. It’s climate controlled, and you can use it for living and sleeping, although not so much for cooking purposes.

However, since that definition says “living, sleeping, eating or cooking purposes,” the definition still fits. 

You could technically bring down food from the kitchen to the basement and eat if the area is finished. You can also stock food and snacks in the area. 

Even if a basement constitutes livable space, it’s rarely included in the overall square footage of your property. That doesn’t change even if you finish a basement. 

How Much Does It Cost to Get a Finished Basement?

Before you can commit to finishing your basement, you must have an expectation of the project costs.

How much money you’ll spend varies based on whether your basement is completely unfinished or partially finished.

Assuming that you haven’t yet begun finishing your basement, according to HomeGuide, the project total for finishing a basement will be between $22,000 and $46,000. 

That’s $32 to $47 per square foot.

We’ve seen estimates that claim to finish a basement can cost up to $80,000. 

That’s certainly within the realm of possibility if you have a lot of big aspirations for the basement, but HomeGuide assures that $46,000 is considered reasonable for a high-end finished basement.

The size of your basement plays a role in the overall costs of finishing it.

If your basement is only 500 square feet, then you might pay around $20,000. 

An 800-square-foot basement would cost $25,000 to finish, a 1,000-square-foot basement would cost $35,000, and a 1,200-square-foot basement would cost $42,000.

If your basement is quite sizable at 1,500 square feet, then finishing it might cost up to $52,000. An 18,000-square-foot basement would be closer to $63,000. 

Let’s say that yours is a smaller basement that’s 600 square feet and features an open floor plan. 

According to HomeGuide, here’s how much the basement finishing services would cost:

  • $600 per egress window
  • $2,756 for insulation
  • $1,700 for a 1.5-ton HVAC unit
  • $2,500 for a bathroom
  • $1,200 for a fridge and stove
  • $60 per door
  • $582 for finished floors
  • $931 for a finished, level ceiling
  • $800 for electrical paneling
  • $771 for electrical wiring installation
  • $80 for plumbing
  • $1,274 for drywall
  • $306 for trim
  • $796 for framing 

Keep in mind that these expenses will all be greater if your basement is divided into rooms since the project now becomes more labor-intensive.

If yours is a 1,200-square-foot basement and still an open-plan design, then the services cost the following:

  • $600 per egress window
  • $4,502 for insulation
  • $1,700 for a 1.5-ton HVAC unit
  • $2,500 for a bathroom
  • $1,200 for a fridge and stove
  • $60 per door
  • $1,177 for finished floors
  • $1,883 for a finished, level ceiling
  • $800 for electrical panels
  • $1,044 for electrical wiring installation
  • $160 for plumbing
  • $1,718 for drywall
  • $335 for trim
  • $1,074 for framing

Is a Finished Basement Worth It?

Now that you have all the facts, it’s time to answer your most burning question. Should you finish your basement?

Like all things in life, a finished basement has its upsides and its downsides. 

No matter how much money you sink into finishing your basement–and as you can see from the last section, it can be quite a lot of money–there are some issues that you can never really “fix” in a basement, per se.

One is the lack of natural light. Nothing beats natural light, even if you put a light in every corner and on every wall. The space will always feel a little artificial. Now, I want to point out that some basements have a back wall that is level to the ground, so windows and an entrance are possible. 

This is the case with my mother-in-law, that lives in our finished basement. The space is complete with a full kitchen, bathroom, laundry room, living and dining room, owner’s retreat, and walk-in closet.

Basements are also moist areas, and that can come back to bite you if you add expensive amenities to your basement such as a flat-screen HD TV, fancy leather furniture, nice carpeting, a costly sound system, and a home bar.

You also might not recoup the full cost of your investment. 

That said, having a finished basement is certainly a lot more valuable to a potential homebuyer than an unfinished basement.

Thus, your home’s curb appeal will go up if you spend the time and money to finish your basement. 


Having a finished basement means the room is decorative and appealing from figurative head to toe with insulation, electricity, level ceilings, and an accessible staircase or door.

Now that you know what’s required to have a finished basement, we hope this article inspires you to consider finishing yours! 

When that first winter comes, be sure to check out our article, “10 ways to heat your basement in the winter.”


Geoff Southworth is the creator of RealEstateInfoGuide.com, the site that helps new homeowners, investors, and homeowners-to-be successfully navigate the complex world of property ownership. Geoff is a real estate investor of 8 years has had experience as a manager of a debt-free, private real estate equity fund, as well as a Registered Nurse in Emergency Trauma and Cardiac Cath Lab Care. As a result, he has developed a unique “people first, business second” approach to real estate.

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