Full basements are standard in this part of the country, and a large share of Sioux Falls homes built in the last thirty years were sold with the lower level unfinished. Finishing it adds living area without a new foundation or roof, which is why it costs far less per square foot than an addition. The work is framing, insulation, electrical, heating and cooling, drywall, flooring and often a bathroom — all of it subject to permit.

  • Framing, insulation and drywall for bedrooms and living areas
  • Egress windows for basement bedrooms
  • Electrical, lighting and heating and cooling runs
  • Bathroom installation using existing rough-in where available
  • Flooring suited to a concrete slab

What it costs and what moves the price

HomeAdvisor's national figures put basement finishing at roughly $7 to $23 per square foot, with an average project near $18,395. The spread comes from what you put in the space. An open family room with basic finishes is at the low end. Each of the following adds meaningfully: a bathroom, a wet bar or kitchenette, a bedroom that needs a new egress window cut into the foundation, and upgrading the electrical panel or the furnace to serve the added area.

Permits, and what happens without one

Basement finishing requires a building permit in Sioux Falls, and a contractor doing it needs the city's Residential Building Contractor's License. A homeowner can pull the permit and do the work personally. Inspections check framing, electrical, plumbing and mechanical work before they are covered by drywall.

Skipping the permit tends to surface later. An inspector or appraiser who finds unpermitted finished space can require walls to be opened for inspection, a buyer's lender may not count the area, and an insurer may question a claim involving it. A basement bedroom must also have an emergency escape opening — an egress window or door — under the residential code, which is a safety requirement and not a formality.

Check moisture and radon first

Finish a basement only after it has proved it stays dry. Watch it through a spring thaw and a heavy rain, fix gutters and grading, and deal with any seepage before framing goes up. Covering a damp wall traps the problem behind drywall.

Test for radon before you start, too. The EPA's radon map places much of South Dakota in its highest-potential zone, and a finished basement is where a family will spend hours. A test is inexpensive, and if a mitigation system is needed it is simplest to install before the walls and ceiling are closed.

Common basement finishing situations in Sioux Falls

  • A growing family that needs another bedroom or two
  • Bare concrete and exposed joists in an otherwise finished house
  • No bathroom on the lower level
  • A basement bedroom with no legal egress window
  • Working from home with nowhere quiet to do it

Basement Finishing FAQs

Does a finished basement increase property tax?

It can. Finished living area generally adds to a home's assessed value, and the permit gives the assessor notice of the improvement. The amount depends on local assessment practice. The Director of Equalization's office in Minnehaha or Lincoln County can explain how finished basement space is treated.

What is the most expensive part of finishing a basement?

Usually a bathroom, followed by egress windows and any electrical or heating and cooling upgrades. Framing, drywall and flooring are the bulk of the square footage but cost less per decision than plumbing does.

What time of year is best to finish a basement?

Any, since the work is indoors — which makes winter a practical choice, when contractors are less tied up with exterior jobs. The one seasonal step is cutting in an egress window, which involves excavation and is easier when the ground is not frozen.

This content is reviewed by the Sioux Falls SD Home Remodeling editorial team and informed by licensed-contractor sourcing, manufacturer documentation, and established industry standards for Home Remodeling. Read our editorial standards.