Is it a tax problem to claim a cottage as a principal residence if we rent it out for one month each summer?

Renting out your cottage for one month per year shouldn’t affect its status as a principal residence in the eyes of the Canada Revenue Agency (CRA). As long as the main reason for owning the property is personal use, the fact that the owner has earned some incidental rental income doesn’t disqualify it.

But “incidental” is the operative word here. The cottage must remain primarily for your own and your family’s use, not for generating income. If you were to make structural changes to your cottage specifically to accommodate the rental activity, or if you were to claim capital cost allowances (CCA), you’d be limiting your freedom to claim it as your principal residence. Visit the CRA website for the exact conditions required to retain the cottage as a principal residence.