The term often applies to a raised area in front of a monumental building or structure, which is usually reached by a grand staircase and surrounded by a balustrade. A terrace may be supported by an embankment or solid foundation, either natural or man-made.

A ground-floor flat with outside space is referred to as a terrace-level apartment. A garden or other area with flooring may be included in this outside area. Apartments on the terrace levels are also referred to as basement apartments.