If you want your basement to be a comfortable, livable space, an 8-foot or higher floor-to-ceiling height is ideal, according to University of Missouri Extension. If you are constructing a home, a 9-foot basement should be dug out to ensure an 8-foot ceiling. Up to 12 inches will be lost to the concrete slab and pipes and duct work for the floor above.
Verify your local building code for basement wall height so the space can be considered livable space. A minimum floor-to-ceiling height of 6 feet 8 inches is a standard requirement. Depending on the municipality, a couple of the inches can be above above the joists and beams. New houses might have a stricter requirement, often 7 feet.
If you construct your basement so it has a 9- or 10-foot ceiling, you will have ample room to install a drop or tray ceiling. Consider also the height of the ceilings on the other floors in your home. If you install a shorter ceiling in the basement, the it will feel more like a basement rather than an extension of the rest of the home. This could play an important role when selling your home.
In most areas, in order to legally finish a basement, you must have a permit. If your ceiling is shorter than the minimum requirement, ask for a waiver. If the waiver is denied, call a contractor to see whether you can raise the ceiling height. The only solution likely will be to dig through the floor to create a deeper basement. This project should be done by an expert and by permit only.