Even though some homeowners may use a semi-finished area as a recreation room or bedroom there are certain criteria that the area should meet to be considered as finished livable area. Living space needs to be “suitable for year round living” - requires permanently installed heat with a continuous power source (electricity, natural gas, permanently installed propane tank, or heating oil)
It is heated and cooled? One of the main criteria is whether the room(s) in question are heated and cooled with the same type of system as the rest of the home.
Is the quality of finish similar to the rest of the house? The finished space must be contiguous and directly accessible from the balance of the living area. Level ceilings must be at least 7 feet high, and at least 6 feet 4 inches under beams, ducts and other obstructions.
Exposed or painted concrete, or exposed or painted plywood is not considered a finished floor.
How do you access the basement? Finished space that lack permanent stairs or direct access, such as plant shelves, are not considered living area. Finished spaces only accessed by ladders, such as lofts, are not considered living area.