We have the chance to buy the townhome we're renting but would also like to buy and move into a detached home this year. How long do we have to live in the townhome before renting it out? Ideally, we'd like to put a smaller downpayment (less than 20%) and save other money we have for a 20% downpayment on the detached home.
For tax purposes, you can start renting your property at any time. The date you start renting the home and when you stop considering your “Principal Residence” really only matters when you sell it. If a home is not your Principal Residence for the entire time you owned it (or if you rent out part of it), then you might have to pay taxes on the capital gains from the sale.
Here is the CRA page that talks about Principal Residence: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-127-capital-gains/principal-residence-other-real-estate.html
And here is their guide to reporting rental income: https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4036/rental-income-2016.html