The Amarinder Singh-government had offered a suitable bungalow to Badal, a five-time Chief Minister of Punjab.
Mr Badal said, "I am thankful to Chief Minister Amarinder Singh for his gracious gesture. It is very graceful of him to make this offer. But I am making my own arrangements for stay. I value his sentiment highly and fully reciprocate it."
The veteran Akali leader's aides are hunting for a house for him in the town's Sector 8 for a week now.
Mr Badal's family owns two big-sized plots of residential land, measuring almost 1.5 acres, in upscale Sector 9, but a new structure is coming up after the old one was pulled down.
Mr Badal, 89, lived in the chief ministerial bungalow in Chandigarh's tony Sector 2 before his Shiromani Akali Dal was routed in the February 4 assembly elections.
Since Mr Badal is only a legislator from Lambi and his party has only 15 legislators in the new assembly, he does not qualify for the status of Leader of Opposition and hence not officially entitled to a government bungalow.
According to reports, the SAD-BJP alliance lost the elections due to a drop in the vote share. The alliance received a 31 per cent vote share while the Congress and the AAP got 38 per cent and 23 per cent respectively, SAD president Sukhbir Singh Badal added.
Mr Badal, the country's oldest serving Chief Minister till his party was decimated in the electoral battle, did not attend the swearing in of the new Chief Minister Captain Amarinder Singh on March 16.