Many living spaces, such as homes, are becoming smarter and connected by using Internet of Things (IoT) technologies. Such systems should ideally be privacy-centered by design given the sensitive and personal data they commonly deal with. Nonetheless, few systematic methodologies exist that deal with privacy threats affecting IoT-based systems. In this paper, we capture the generic function of an IoT system to model privacy so that threats affecting such contexts can be identified and categorized at system design stage. In effect, we integrate an extension to so called Data Flow Diagrams (DFD) in the model, which provides the means to handle the privacy-specific threats in IoT systems. To demonstrate the usefulness of the model, we apply it to the design of a realistic use-case involving Facebook Portal. We use that as a means to elicit the privacy threats and mitigations that can be adopted therein. Overall, we believe that the proposed extension and categorization of privacy threats provide a useful addition to IoT practitioners and researchers in support for the adoption of sound privacy-centered principles in the early stages of the smart living design process.