Humber/Ontario Real Estate Course 1 Exam Practice

Which of the following statements is NOT correct concerning a principal residence?

1. A home on three acres of land automatically qualifies as a principal residence

2. The taxpayer must own the residence to qualify as a principal residence

3. A principal residence can include a single-family home or a mobile home

4. The residence must be designated as a principal residence for a specific tax year

5. A condominium unit can qualify as a principal residence

6. Ownership duration and usage are factors in determining a principal residence

The correct answer is: A home on three acres of land automatically qualifies as a principal residence

The statement that a home on three acres of land automatically qualifies as a principal residence is not correct. A principal residence is determined by certain criteria, not solely by the size of the land it occupies. While owning a home on a larger lot may contribute to qualifying as a principal residence, the actual qualification depends on factors such as the owner’s intention to use the property as their primary residence and how the property is used during the year. In contrast, the other statements are accurate reflections of what defines a principal residence. Taxpayers must own the residence to claim it as their principal residence, and various forms of housing, including single-family homes and mobile homes, can qualify. Additionally, the designation of a residence as the principal residence for tax purposes must occur for a specific year, and ownership duration as well as how the property is used can influence its classification. Condominiums are also eligible to be designated as principal residences, further indicating that property type and ownership structure can vary within the definition of a principal residence.