The difference is this. A terrace when refering to a building is a flat raised surface and a pation is an open area adjoined to building that is paved but not raised. A patio connects the house to the garden and is made of bricks or other material. There is no roof. It is open to the sky. It is not raised as a terrace is. John

thanks Randy too, thank you for explaining more

Expanding on John's excellent answer, let me say that a balcony for an apartment or house, for example, might exist on any floor above the first. Normally, I think of a patio as being on the ground floor.