You don't have to make the declaration each year. You do that when you sell it. Per Section 54 of the Canadian Income Tax
https://www.thomsonreuters.ca/en/dtprofessionalsuite/blog/principal-residence-disposition.html#:~:text=The%20basic%20definition%20of%20a,at%20the%20time%20of%20sale.
The sale of a principal residence can be a complex transaction to enter on a tax return. Let’s have a look in detail at some of the concepts as well as other considerations that have to be taken into account when designating a property as a principal residence.
Basic Definition of a Principal Residence
The basic definition of a principal residence, as outlined in section 54 of the Income Tax Act (ITA), is any housing unit owned by the taxpayer, which he or she, or someone related to that taxpayer, ordinarily inhabited during a particular year, and is designated as a principal residence at the time of sale. The taxpayer can designate the years he /she resided in the housing unit for an exemption of capital gains under paragraph 40(2)(b) of the ITA.
Five important criteria to consider when determining the principal residence designation
The definition itself can be broken down to five important elements, which will be developed further:
a) The sale is related to a disposition of what the CRA calls a “housing unit”;
b) The taxpayer is the owner of the property;
c) The taxpayer or someone related to the taxpayer “ordinarily inhabited” the housing unit;
d) Land attached to the housing unit is included as part of the principal residence;
e) You must designate the housing unit as a principal residence.
Housing Unit
As per paragraph 2.7 of S1-F3-C2 Income Tax folio, an eligible housing unit includes:
i. a housing unit, which the CRA has accepted could include:
o a house;
o an apartment or unit in a duplex, apartment building or condominium;
o a cottage;
o a mobile home;
o a trailer; or
o a houseboat.
a leasehold interest in a housing unit; or
a share of the capital stock of a cooperative housing corporation, if such share is acquired for the sole purpose of obtaining the right to inhabit a housing unit owned by that corporation.