When can a basement be counted as a story for calculating living space?

A basement can be counted as a story for calculating living space when it is finished. The term "finished" means that the basement has been completed to the point where it can be used as a livable area, typically featuring completed walls, ceilings, flooring, insulation, and appropriate heating, cooling, and lighting. This transformation allows the basement to serve the same function as above-ground living spaces, thus justifying its inclusion in the total square footage of the dwelling for purposes such as real estate valuation, building codes, or occupancy considerations.

In contrast, simply having a half-finished basement does not meet the necessary requirements since it lacks the necessary completion for occupancy. A separate entrance, while advantageous for a basement, does not inherently qualify it as a story; it is more about the functionality of the space. Lastly, while having appliances can enhance usability, appliances alone do not determine if the area is finished or livable.