Reworking because I now found my source, everything I "write" from now on is pritty much a copy paste.
A Home needs to be at least 7 blocks tall and 9 blocks wide (or 5 blocks tall and 7 blocks wide not including walls, floor or ceiling).
Including the floor, side walls and ceiling, a Home must have at least 60 total tiles, but less than 1900.
A house must be fully enclosed:
The side walls (vertical blocks) can be made of blocks, doors or wood platforms.
The floor and ceiling (horizontal blocks) can be made of blocks or wood platforms.
A House requires at least three tiles of empty floor space.
Furniture must be placed so that at least three tiles of space exists that is clear of any furniture or blocks. This includes the Comfort and Flat Surface items (see below), which in a minimum-sized house must be placed off-center in order to make the House suitable. This space can be left between two furniture items, or between an item and the House's framework wall.
Some decorative items do not affect this requirement, such as Statues, which can be placed in the empty area without invalidating the house.
One of these empty floor tiles must be a solid (non-platform) block, which the NPC needs in order to stand at night.
A house must have at least one entrance, which can be a door in a wall or a wood platform in the ceiling or floor.
A house must have a background wall in order to be suitable. Any walls crafted or mined by the player are valid, when placed.
Walls not placed by a player (such as naturally-occurring dirt walls) do not count, with the exception of those generated in Floating Island structures, or the planked walls found in Underground Cabins.
Background walls may contain holes if the holes are no taller or wider than four tiles. (e.g. 4 background tiles across or tall, so the maximum size is 4x4, 16 in total. The hole cannot exceed 4x4 or 16 tiles.).
Walls may have multiple holes as long as they are separated by at least a single tile of background walls.
Having background holes will sometimes allow monsters to spawn within the Home.