An appraiser will give more value if is above grade living space.
It is also a good idea if you are listing the space to say whether it has windows or a walkout basement.
I recently read an article that there is no law anywhere in the country that defines what you can or cannot as square footage of a property. I do not remember the source of the article. I would caution that just because there may not be a law or ordinance, does not mean that there is not a guideline or standard of practice in your town. You should check with your building inspector, Assessor and Town Clerk to make sure they do not have any guidelines.
Typically a lower level on a raised ranch does have an area that is considered living space.
Keller Williams Realty