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Adding More Space to Your Home: Is It Better to Build Up or Dig Down?

Published June 2, 2021
Updated: December 7, 2023
Est. Reading: 5 minutes

If you want more space, but you aren’t able to expand your home’s footprint, you are left with two choices: add a second story or build a basement.

For most homeowners, this decision comes down to the simple question of which is the cheaper option. The answer, however, isn’t so simple. The best and cheapest choice depends on many factors.

Constructing a Basement

The idea of digging or finishing a basement may sound less labor-intensive than taking off the roof of a house to add a second story. However, it’s not as easy as getting some shovels and a concrete truck or slapping up some drywall.

To develop an unfinished basement, the cost of excavating and pouring a floor is around $33 per square foot vs. a minimum of $86 per square foot to add on in the traditional manner (1). When thinking about basement construction in Calgary, the frost line is so low you likely have a head start on this part of the project as very few homes do not feature a basement.

If this is the case, then you may just need to finish your basement. The price range for finishing your basement will be somewhere around $32 per square foot (2). This can vary greatly, however, depending on your plans for the space. The more rooms, plumbing, and high-end fixtures, the more expensive the completed project will be. 

To ensure you get the most when developing your basement from scratch, reference the following basement construction checklist:

  • Getting a permit (3)
  • Installing footings
  • Adding a drainage system
  • Framing walls
  • Installing a vapor barrier
  • Pouring the cement floor
  • Waterproofing walls
  • Installing steps

You will also need to consider additional moisture-battling steps like a sump pump and dehumidifier. 

If your home already has a basement, finishing it will likely be the cheapest option. If you are digging a new basement to add more livable space, keep in mind you will be paying for both the basement construction and the basement finishing.

When is building a basement the smarter option? 

  • If your house is on a slope, it may be advantageous to build a basement because there are more options for natural light. It is also easier to add a walk-out entrance if your house is on a slope. 
  • If you have a modular home, building a second story is typically as easy as taking off the roof and adding on. However, if your home is stick built the process is more involved and, of course, more expensive. It’s always a good idea to have the home evaluated by a structural engineer so you know exactly what adding a second story entails (4).
  • The average basement build requires less material than adding a second story, so the price of lumber is something to consider. If you are only finishing a basement, this could cut costs considerably. 
  • The frost line in Alberta is about 3 feet, so footers must be at least that deep in the ground for any home (5). Chances are, your jurisdiction requires them to be even deeper. This means that you may already have the footer depth necessary for a basement without having to go deeper. This can save a lot of time and money when adding a basement.
  • You’re concerned about heating/cooling. One-story homes are more energy efficient (6). Since basements are underground, they stay cooler in the summer and warmer in the winter.
  • Your goal is to add an income property. If you are unable to add on to the side of your home, a basement suite is the next best option. 

Adding a Second Story

Adding a second story to your one-story home can cost as much as a traditional extension. However, you add more value to your home this way than by investing in basement construction. 

If you ever plan to sell your home, the basement cannot be included in the appraisal (7). Even if it is clearly a livable space, only above-grade areas can be counted in the square footage assessment. If you build a second story, any future listings will reflect the true size of your livable space.

There are a few inconveniences to consider when building a second story addition that may not come into play with a basement:

  • Living in a construction zone. 

When the roof is being removed and floor joists are being installed above your head, there is no avoiding the noise. You may also be required to leave the premises temporarily for safety reasons.

  • Redoing the outside to match.

If you plan to add a second story, it will likely mean replacing the siding so that the exterior looks cohesive.

  • Creating an aesthetically pleasing design.

You don’t want your addition to look like an addition, so unlike with a basement, you’ll need to put some thought into how the building will look once completed. It may help to hire a company that has a designer on hand to help you visualize this (8).

When is adding a second story the smarter option?

  • If adding value to your home is important, building up is best.
  • You enjoy natural light. If your home is not on a slope, you may wind up with small windows that can make some homeowners feel shut in.
  • Your footers are short. Some people have the perfect foundation for a basement without having to do much, if any, excavation and footing work. The more structural work that needs to be done before progress can be made, the closer the cost gets to a traditional addition.
  • You’re concerned about flooding. You can waterproof a basement, but the fact is that a second story will always be less likely to flood than a structure built below grade (9).
  • You like the look! Maybe you just like how a two-story home looks. Perhaps you’re looking forward to redoing the exterior. Your basement might look fabulous, but no one on the outside will know.

When choosing between basement construction or a second story addition, the best choice depends on many factors. Personal preference, your future plans for the property, and your home’s current layout can make all the difference.

The best thing you can do is talk to a contractor that is well-versed in all types of additions. Reborn Renovations can help you with building a second story, constructing a finished basement, or expanding the footprint of your current home by building out.

Reborn has a designer on hand, experienced contractors, and reliable subcontractors. 

Make your existing home your dream home with Reborn Renovations! View some of our past work in the gallery, and be sure to contact us to figure out how we can help you increase your living space. 


  1. https://homeguide.com/costs/foundation-cost#:~:text=The%20cost%20to%20build%20a%20basement%20is%20%2426%2C000%20to%20%2480%2C000,size%2C%20style%2C%20and%20finishing.
  2. https://homeguide.com/costs/cost-to-finish-a-basement
  3. https://www.calgary.ca/pda/pd/home-building-and-renovations/basement-development.html
  4. https://www.bhg.com/home-improvement/remodeling/additions/second-level-home-additions/
  5. https://www.livrealestate.ca/blog/2017/04/how-to-build-a-fence.html
  6. https://pennyelectric.com/blog/single-story-homes-really-save-energy/
  7. https://www.reca.ca/consumers/tools-resources/ask-charles-consumer-questions/finished-basement-square-footage-listing/
  8. https://www.rebornrenovations.com/interior-design/
  9. https://www.bobvila.com/articles/tips-for-waterproofing-basement-walls/
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