For appraisal standards, a home has 2 basic types of square footage. Gross Living Area (GLA) and Below Grade.
GLA is any finished living space that is fully above grade. This means that the entire level must be above grade. For instance, if the home is on a slope and the back has a walk-out basement but at the front of the home a portion of that basement is below grade then that level is not considered in the GLA.
Below Grade square footage is any part of the structure where its floor level is partially (even by 1 inch) or entirely below grade.
For real estate marketing purposes, there is a mixture of how this is treated and advertised. For instance, a rambler with 1500 square feet on the main level and 1500 square feet in the basement would be called a 1500 square foot rambler in one part of the country and the exact same home would be called a 3000 square foot rambler in another part of the country.
In either case, the value of the GLA will be treated and calculated higher than the Below Grade area. The factor used to calculate the value will highly depend on where the home is located. If the basement has any finished space, it will be calculated separetly.
Answer. Start with the history of the home from the very first day it was built, including all of its building plans and permits. Then check the files of the County/Property Assessor’s Office to see how the home is treated for tax purposes. Next identify the purpose(s) of the basement under all laws regulating the use of basements, including income tax, title and zoning laws. Why?
First, you need to know whether your home is on solid legal ground and no clouds are on the home’s Title. I started my search for all documents that showed Spain’s ownership of the lands comprising California and the situs of my current home. Neighbors thought I was crazy, but then they started to think about clouded titles. Then I collected the documents from the era when Mexico owned the lands comprising my situs and when these lands were transferred to individuals called Americans.
Second, I collected all the permits, signatures, etc. of every one involved preparing the land for my home. From these documents, you can obtain whether soil samples were taken and reported or whether the law required such tests.
Third. Is my house on solid ground? Who said so? This is where above-ground and below-ground basements can cause major problems, particularly when it comes to repairs, expansion, remodeling, or home businesses/offices.
Fourth. Hopefully you have been collecting the history of all the laws associated with your land. You must work with both the County/Property Assessor and the City/County Clerk to identify all laws and amendments. Homes with basements allowed under one law, may be denied further improvements under existing laws. Still, there might be a law that precludes the basement from being included in the square footage.
Fifth. When a basement is considered part of the home’s square footage is a case-by-case assessment based upon extensive research. On the bright side, you will have established your legal right to ownership which should be an excellent set of documents to share when selling your home.
I hope this helps.