The Income Tax Act defines a principal residence as a home you live in, such as a house, cottage, condo, trailer, or other residence, and not a shed, garage, or storage container. It must meet all of the following criteria to meet the definition of principal residence for tax purposes: You own the property, either by yourself or jointly with someone else. The property must be a housing unit, a leasehold interest in a housing unit, or a share of the capital stock of a co-operative housing corporation you acquire only to get the right to inhabit a housing unit owned by that corporation. You, your current or former spouse, or any of your children lived in it during the year. You officially designate the home as your principal residence to tax authorities.