A residence must meet certain basic requirements before it can qualify as a primary residence (Paragraph 44 of the Eighth Schedule).
- It must be a structure, including a boat, caravan or mobile home, which is used as a place of residence by an individual.
- An individual or special trust must own an interest in the residence.
- The individual with an interest in the residence, beneficiary of the special trust, or spouse of that person or beneficiary must ordinarily reside in the home and use it mainly for domestic purposes as his or her ordinary residence.
The primary residence exclusion also applies to the land on which the primary residence is situated, including unconsolidated adjacent land if the following conditions are met:
- The exclusion applies only to a maximum of two hectares.
- The land must be used mainly for domestic or private purposes together with the residence.
- The residence must be disposed of at the same time and to the same person as the land on which it is situated.