How Much Does Finishing a Basement Add to Home Value?
If you feel like you have outgrown your home, you are likely looking for ways to maximize your current space before considering a move. One of the most common questions we hear from homeowners in Milton, Ontario is: “How much value does a finished basement really add?”
At the Roach Family Real Estate Team, we provide a true full-service experience that handles the heavy lifting for you—including helping you decide which renovations will yield the best return on investment (ROI).
The Bottom Line: What is the ROI?
On average, a well-executed basement renovation in the Ontario market can provide a return on investment of 50% to 75%. This means if you invest $50,000 into finishing your basement, you could see your home’s resale value increase by approximately $25,000 to $37,500.
While this ROI might be slightly lower than a top-tier kitchen remodel, it offers something just as valuable: a massive increase in usable living space that makes your property stand out among other homes for sale in Milton.
Factors That Impact Your Basement’s Value
Not all finished basements are created equal. Several key factors will determine whether you hit the high or low end of that ROI:
Legal & Permitted Work: This is the single most important factor. Unpermitted work can actually decrease your home’s value or make it harder to sell. A legal basement that meets all building codes is much more attractive to buyers and appraisers.
The “Income” Factor: Converting your basement into a legal secondary suite or rental unit can dramatically boost your ROI, sometimes reaching 140% to 200% when you factor in both resale value and monthly rental income. In the GTA, a legal basement apartment can generate between $1,500 and $2,500 in passive income per month.
Quality of Finishes: To get the best return, the basement should feel like a natural extension of the rest of the house. Using high-quality flooring (avoiding carpet in moisture-prone areas) and ensuring good lighting can significantly enhance “perceived value”.
Walk-out vs. Standard: If you have a walk-out basement, you will typically see a higher increase in home value compared to a standard underground basement due to the increased natural light and easier access.
Appraised Value vs. Square Footage
It is important to manage expectations regarding your home’s official square footage. In Ontario, appraisers typically value “below-grade” (basement) space at about 50% to 70% of the value of “above-grade” (main floor) space.
For example, if the price per square foot for the main floors in your neighborhood is $200, your finished basement might be appraised at $100 to $140 per square foot.
Is It Worth It for You?
If you are planning to sell your house in the next 1–3 years, a basement renovation should be treated as a strategic investment to help you compete with new developments in Milton. If you plan to stay longer, the “value” also includes the years of enjoyment your family gets from a new home office, gym, or guest suite.
Ready to see how a finished basement impacts your specific home value? Whether you’re exploring townhomes for sale or getting your current property ready for the market, we help growing families upgrade with less stress.