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What is Your Principal Residence

by | April 22, 2026

Everybody needs a place to live, a place to call home. Legally, a principal residence is defined as a property that you, your spouse or common-law partner, or your child ordinarily inhabit at some point during the year. The property can be a house, cottage, condominium, apartment, or similar dwelling.

It’s important to note that only one property can be designated as a principal residence per family unit (you, your spouse or common-law partner, and any unmarried children under 18). The definition and rules regarding a principal residence are crucial for tax purposes, particularly in relation to the principal residence exemption on capital gains.

Qualification

Type of Residence

Minimum Time to Maintain Principal Residence

Residency

Executive Home
Executive Home

Qualification

To qualify as a principal residence, the property must meet the following criteria:

  • Ordinarily Inhabited: You or your family must live in the property for some time during the year. It does not need to be your main residence throughout the entire year, but it must be used as your primary home.
  • Ownership: The property must be owned by you or jointly with others.
  • Personal Use: The property must be used primarily for personal living purposes, not for generating income (though partial income-generating use is allowed, such as renting out a portion of the home, but the principal residence exemption may be reduced).
  • Designated as a Principal Residence: You must designate the property as your principal residence when filing your taxes to take advantage of the principal residence exemption, which allows you to avoid paying capital gains tax on the sale of the home.

The land on which your home is located can be part of your principal residence. Usually, the amount of land that you can consider as part of your principal residence is limited to half of a hectare (1.24 acres). However, if you can show that you need more land to use and enjoy your home, you can consider more than this amount as part of your principal residence. For example, this may happen if the minimum lot size imposed by a municipality at the time you bought the property is larger than half of a hectare.

Type of Residence

Your principal residence can be any of the following types of housing units:

  • a house
  • a cottage
  • a condominium
  • an apartment in an apartment building
  • an apartment in a duplex
  • a trailer, mobile home, or houseboat

Minimum Time to Maintain Principal Residence

Let’s say you are a contractor or an employee who does work outside of Canada for a period of time. Can you lose your principal residence status?

It is important not to confuse your residency for the purposes of taxation, and your principal residence status in regards to your home.

There is no specific minimum amount of time that you must live in a property each year for it to qualify as your principal residence under the law. The key requirement is that the property must be “ordinarily inhabited” by you or your family at some point during the year. This means that you must use the property as your home and intend for it to be your principal residence, even if you only live there for a short period during the year.

The determination of whether a property is your principal residence depends on your intention and the use of the property, rather than a fixed duration of time. However, if the Canada Revenue Agency (CRA) were to challenge the designation of a property as your principal residence, they would look at various factors to determine your intent and use of the property. These factors might include:

  • Regularity of Inhabitation: How often and for how long you and your family live in the property.
  • Type of Use: Whether the property is used primarily for personal living purposes or for income generation.
  • Personal Connections: Whether you have personal ties to the property, such as it being the address for mail, voting, or other legal documents.
  • Other Properties: Whether you have other properties that might also be considered your home, and how you use them.
  • Length of Ownership: The duration for which you have owned the property and your reasons for buying or selling it.

Ultimately, while there is no strict minimum time requirement, the use and intention behind the property are what matters most in determining whether it qualifies as a principal residence. If you work away from your home for a given time, but still maintain the other factors supporting your principal residence, the amount of time away from your home should not impact your principal residence status.

Residence Status

Under the Canadian income tax system, an individual’s liability for income tax is based on his or her status as a resident or a non-resident of Canada. An individual who is resident in Canada during a tax year is subject to Canadian income tax on his or her worldwide income from all sources. Generally, a non-resident individual is only subject to Canadian income tax on income from sources inside Canada.

Types of Canadian Tax Residency:

Factual Resident

You are a factual resident if:

  • You live in Canada, or
  • You are temporarily abroad but still maintain strong ties

This is the most common category.


Deemed Resident

You may be considered a resident even without strong ties if:

  • You stay in Canada for 183 days or more in a year, and
  • You are not considered a resident of another country under a tax treaty

Deemed Non-Resident

You may not be considered a Canadian resident if:

  • You have ties to Canada but
  • A tax treaty (e.g., with the U.S.) assigns you residency to another country

Non-Resident

You are a non-resident if:

  • You do not have significant residential ties, and
  • You normally live outside Canada

Residency is not elective—you don’t “choose” it.
It is determined based on your actual life circumstances.

For example:

  • A client working abroad but with a spouse and home in Ontario → likely still a resident
  • A newcomer with no ties but staying >183 days → may become a deemed resident

For more information about residency status see:

Income Tax Folio S5-F1-C1, Determining an Individual’s Residence Status

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Allen Ehlert

Allen Ehlert

Allen Ehlert is a licensed mortgage agent. He has four university degrees, including two Masters degrees, and specializes in real estate finance, development, and investing. Allen Ehlert has decades of independent consulting experience for companies and governments, including the Ontario Real Estate Association, Deloitte, City of Toronto, Enbridge, and the Ministry of Finance.

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