The general rule of thumb is if a lower level is more than 50% above ground it can be calculated as "living area". If you are a buyer it is important not to assume anything and if you are buying based on square footage than do your due diligence. If you are a seller make sure the quare footage is calculated correctly.
Basement square footage does not hold the same value as the rest of the home so when you are determining a price value you should remove it when crunching numbers. It does have some value so if it is finished a good rule of thumb is to give it half the value (per square foot) of the rest of the home.
If basement is not a walk-out, then square footage should be broken out separately and should indicate square footage amount as "basement finish".
In the MLS we are asked to put down whether we are including the basement in our sq. ft. description. You really should only include above grade space in this analysis. Best
That being said in MA if it is below grade does not count, (for most appraisers and realtors and building inspectors), however a finished basement does add some value as a home improvement. It is ultimately up to the appraiser to decide if the value of a finished basement is the same as the value of a main living area(s).
I'm not sure how it is calculated in Ashland. In Wisconsin square footage is all over the board. The way it is calculated changes from municipality to municipality. Generally the basement is not included unless it has egress windows and is finished.
Some municipalities use the outside footprint while others use the inside dimensions of each room. As Greer already stated, you are wise to question the calculation. And I always tell my buyers that if the exact square footage number is important to you or the exact size of a room or the exterior parcel, always measure yourself.
You are wise to question the calculation. It's often best to do it yourself. It is the only way to make sure you are comparing apples to apples. Just take the price of the whole property and divide by the square footage of livable space. You may or may not want to include a finished basement. Does a finishable basement count for you? What about a finished basement that doesn't have a walk-out door (i.e. it's a bulkhead, not ground level) These are all variations ... as is the dimiensions of the lot (if it is a single family).