The Smart Home concept, associated with the pervasiveness of network coverage and embedded computing technologies is assuming an ever-growing significance for people living in the highly developed areas. However, the heterogeneity of devices, services, communication protocols, standards and data formats involved in most of the available solutions developed by different vendors, is adversely affecting its widespread application. In this paper, promoted by several promising opportunities provided by the advances in Internet of Things (IoT) and Cloud Computing technologies for facing these challenges, a novel multi-layer cloud architectural model is developed to enable effective and seamless interactions/interoperations on heterogeneous devices/services provided by different vendors in IoT-based smart home. In addition, to better solve the heterogeneity issues in the presented layered cloud platform, ontology has been used as a promising way to address data representation, knowledge, and application heterogeneity, and an ontology-based security service framework is designed for supporting security and privacy preservation in the process of interactions/interoperations. Challenges and directions for future work on smart home management have been also discussed at the end of this paper. •A multi-layer cloud architectural model is developed to enable effective and seamless interactions/interoperations on heterogeneous devices/services provided by different vendors in IoT-based smart homes.•The ontology method has been used to better solve the heterogeneity issues in the presented layered cloud platform.•An ontology-based security service framework is designed for supporting security and privacy preservation in the process of interactions/interoperations.•Challenges and directions for future work on smart home management have been discussed.