Could a housing unit qualify as a principal residence of a taxpayer if the taxpayer rented the property to a child for a fair market value (or less than fair market value) rent? CRA responded (TI translation):
The definition of principal residence does not provide that a housing unit which is rented cannot be a principal residence when the tenant who lives in the unit is one of the persons listed in paragraph (a) of this definition. Consequently, we are of the view that the mere fact that a taxpayer rents a housing unit to a child for a rent corresponding to its fair market value or some other value, will not prevent the taxpayer from designating this unit as his principal residence provided that all the conditions provided in the definition of "principal residence" are satisfied.