There are two issues to deal with if you want to leave the water heater where it is when remodeling a garage into living space for your home:

1. Supplying air for combustion - Once the room becomes an indoor space, the calculation to allow it to use indoor air is complicated. The air infiltration (leakage of air into the home from the outside) must equal 0.40 ACH (Air Changes per Hour), plus there must 50 cubic feet of air volume in the room for each 1,000 BTU rating of the water heater. A typical 40-gallon water heater rated at 38,000 BTU would need 1900 cubic feet of air, equivalent to a 15 foot by 16 foot room with an 8 foot ceiling.
       The better solution is to put it in a closet that separates it from the living area and has an outdoor air source, typically a high and low duct coming down from the attic.
2. Carbon monoxide poisoning - Any obstruction in the water heat flue can allow combustion gas byproducts, including carbon monoxide, to backup into the room. This is especially dangerous if the water heater is in a bedroom (called a “sleeping room” in the building code). So a gas water heater cannot be installed in a bedroom, bathroom, or a closet opening onto a bedroom or bathroom (with the exception of a direct-vent water heater), unless it is inside a dedicated enclosure, with a solid, weatherstripped, and self-closing door, with a sweep at the bottom and all combustion air supplied from the exterior.

    Two ways to get around all these requirements are to replace your gas water heater with an electric one at the same location, or install a tankless gas water heater at an outside wall near the original water heater location. The electric water heater will likely be the more cost-effective solution of the two.

• • • • • • • • • • • • • • • • • • • • • • • • • • • • 

Here’s links to a collection of more blog posts about WATER HEATERS:

• Are water heaters required to be raised off the floor? 

• Can a Temperature and Pressure Relief (TPR or T&P) valve be mounted to discharge horizontally?

• Where are gas water heaters not allowed to be installed?  

• Is the minimum size water heater inlet pipe 1/2" or 3/4" according to the building code?

• Can you use a light switch for a water heater disconnect? 

• How can I tell if a water heater is HUD-approved for mobile/manufactured homes?

• Can you wire a 240-volt water heater with 120 volts? 

• Why should a tankless water heater have an isolator/service valve kit installed?

• When was a gas water heater first required to be elevated 18 inches above a garage floor?  

• Can the temperature and pressure relief (TPR) valve discharge pipe for a mobile/manufactured home water heater terminate under the home? 

• What is the purpose of a thermostatic mixing valve above a water heater? 

• Does a tankless gas water heater still work with no electricity during a power outage?  

•  Why do water heaters have a sacrificial anode? 

• What is the difference between a manufactured/mobile home water heater and a regular water heater? 

• Does a tankless water heater require a pressure relief valve?

• When is a water heater drain pan required?

• Why is there water in my water heater drain pan?

• What does it mean when a water heater Temperature/Pressure Relief (TPR) discharge pipe is "trapped"? 

• Can I leave a gas water heater in place when remodeling a garage into a family room or bedroom? 

• What is the difference between a single element and dual element electric water heater? 

• What is an FVIR water heater?

• What is a heat pump water heater?

• What is a dielectric union?

• What's that powdery crust on the pipe connections at the water heater? 

    Visit our WATER HEATERS and REMODELING pages for other related blog posts on this subject, or go to the INDEX for a complete listing of all our articles.