Basement

Understand what a basement is in Canadian homes, how it’s used, what types exist, and how it affects property value and legal standards.

Basement

June 06, 2025


What is a Basement?

A basement is the lowest level of a home, located below the main floor, which may be used for storage, utilities, living space, or rental purposes.

Why Basements Matter in Real Estate

In Canadian real estate, basements are valued for their functional space and potential to add income or living area, especially in urban markets.



Types of basements include:
  • Full basement (finished or unfinished)
  • Partial or crawl space
  • Walk-out or garden-level basements



Basement features can affect market value, insurance, and utility costs. Finished basements must comply with egress and electrical code to be considered livable.



Understanding basement types, risks (e.g., flooding or radon), and renovation standards helps buyers and homeowners make informed decisions.

Example of a Basement

The buyer purchases a home with a legal secondary suite in the basement, providing rental income and helping qualify for a larger mortgage.

Key Takeaways

  • Located below the ground floor
  • Used for storage, living, or income
  • Must meet code for legal occupancy
  • Affects value, insurance, and utility usage
  • Prone to moisture and radon issues

Related Terms

Additional Terms

Recourse Loan

A recourse loan is a type of loan where the lender can pursue the borrower’s personal assets, beyond the collateral, in the event of default.. more

Pari Passu

A pari passu clause is a contractual provision ensuring that multiple creditors share equally in repayment priority from the borrower’s assets.. more

Non-Recourse Loan

A non-recourse loan is a type of loan where the lender’s only remedy in case of default is to seize the collateral property; the borrower is not. more

Net Operating Income

Net operating income (NOI) is the total income generated by a property after operating expenses are deducted but before taxes and financing costs.. more

Mechanic's Lien

A mechanic’s lien is a legal claim by a contractor, subcontractor, or supplier for unpaid work or materials provided for a property.. more

Lis Pendens

Lis pendens is a legal notice filed in the land registry indicating that a property is subject to ongoing litigation that may affect its title.. more

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