Principal Residence

Posted in Finance, Accounting and Economics Terms, Total Reads: 490

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. 

Hence, this concludes the definition of Principal Residence along with its overview.


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