Posted in Finance, Accounting and Economics Terms, Total Reads: 75
Definition: Principal Residence
Principal Residence is the main house where one lives most of the time. For a person, to call a building as a principal residence, the person himself or the directly related family members should be living in that particular building for a minimum period of 5 years.
Just moving furniture or personal belonging does not suffice the requirement of principal residence.
The concept of Principal residence play a very important role for people having more than one residential properties and selling these properties may get different tax exemption, as principal residence get higher tax exemption than other non-principal residential properties and you do not need to include the capital gain earned on selling principal residential property .
Principal residence is often one of the most important parameter or criteria which is used by banks or authorities for verification of person's personal details. Principal residence is where a person receives all bank statements, his/her official passport or other government ID's have that address, etc. Hence, the principal residence is of great importance even from an official perspective.