Domicile: Legal Definition, Types, and How Taxation Works

What Is a Domicile?

Your domicile is the place where you maintain a permanent home. Your country of domicile refers to the country in which you permanently reside. Your intent to remain in this place indefinitely makes it your domicile and makes you the place's domiciliary. Your domiciliary status subjects you to specific laws. Thus, domicile is a legal construct used to determine where you vote, file lawsuits, pay taxes, claim benefits, and oblige governmental authority.

Key Takeaways

  • Domicile refers to the place you call home permanently.
  • Your domicile is important for legal purposes such as paying taxes, voting, and claiming benefits.
  • Residence and domicile have different legal definitions and are differentiated primarily by the length of time you plan to live in a specific location.
  • If you and your spouse divorce, your legal domicile will play a role in informing the courts about child support and alimony payments.
  • You may own more than one home, but you can only have one domicile.

Understanding Domiciles

At birth, your domicile of origin is the home you share with your parents or legal guardians. This location remains your domicile until you reach the age of majority and acquire a domicile of choice. This locale remains your domicile until you leave it and relocate to a new domicile with the bona fide intent to make the new domicile your fixed and permanent home. 

No matter how many homes you own, only one is your domicile. It is the one you acquire intending to remain indefinitely and to which you relocate after you abandon your old domicile. It could be the home where you live, work, bank, vote, and register your car.

As noted above, there are certain rights and responsibilities associated with your domicile. This means that your domicile means you must adhere to certain activities based on this location. This includes things like voting, certain registrations (your driver's license and car registration), filing taxes and claiming benefits, and filing lawsuits, among others.

Residence and domicile are not the same and have distinct legal meanings.

Special Considerations

Some people live equally in two homes. For example, suppose that after many years of living in Maine and vacationing in Florida, a person then decides to live half the year in Maine and the other half the year in Florida. They file their taxes and make a will in Maine but vote and have registered their car in Florida.

This even split of their essential activities between Maine and Florida indicates that they did not intend to abandon Maine when they moved to Florida. Consequently, both Maine and Florida are their residences. But since they file taxes in Maine, that state becomes their domicile—not Florida.

You cannot change your domicile by merely filing a Declaration of Domicile in another country or?state.?Instead, your lifestyle must comport with a permanent change of domicile. Your intended domicile can be inferred from the place where you live and spend time.

Legal and Tax Consequences

Your domicile is the location you declare in legal documents, such as the address you use to vote, bank, register vehicles, and pay taxes. Ending a domicile association includes your efforts to close bank accounts, surrender your driver’s license, remove your name from voting rolls, and pay taxes as a non-resident.

Your domicile carries legal consequences. It defines which country, state, and courts have jurisdiction to probate wills, administer estates, adjudicate lawsuits, and assess state income and death taxes. After a divorce, the legal domicile can affect your ability to claim and monitor alimony and child support payments.

Your domicile affects the circumstances under which you pay state taxes. Residence in a country or state limits the reach of taxing authorities to tax income you earn within its borders.

The imposition of death taxes is by the domicile country or state. Depending on your stated domicile and that of your beneficiaries, estate tax implications may be dramatically different. The domicile can extend its reach to all of your income from any source worldwide. However, indications of residence, such as owning real property (or indications of domicile, such as failing to abandon your previous domicile properly) can subject you to taxes in more than one state.

Upper-income taxpayers will often domicile in a state that has the lowest tax liability for them.

Domicile vs. Residence

You may have heard residence and domicile being used interchangeably to refer to your home. However, the two terms have distinct legal meanings. The distinguishing factor between the two words is the length of time you intend to live there.

A residence is a home you expect to live in for a temporary period, whereas a domicile is a home you plan to live in for an indefinite period. Any place you own property or live for a prescribed period can be your residence. But only the one site where you intend to make your permanent home and remain indefinitely can be your domicile. Thus, you can have many residences, but you can have only one domicile in one intended place.

Your domicile is also your residence, but your residence may or may not be your domicile.

How to Establish a New Domicile

When you move, it may be necessary to take steps to establish and prove your new domicile. Here are a few things you should consider:

  • Change your driver's license to the state of your domicile and your car registration.
  • Do you vote? Make sure to change your voter registration, too.
  • In addition to forwarding your mail, alert your bank and other financial companies you use to your change of address.
  • Mark your last state income tax (in your previous home state) as final and inform the Internal Revenue Service (IRS) of your new address, either over the phone or online.

Inform the professionals in your life, from doctors to dentists, of your move and update your new address with all of your credit cards, passport, bank and brokerages, utilities, and cell phone providers. Set up bank accounts with your new local branch and if you have young children, sign them up for the local schools and sign up for your local library.

What Is the Legal Definition of Domicile?

The legal definition of domicile is the address you declare?in legal documents to pay taxes, receive social security, vote, bank, and register vehicles and animals.

What Is the Difference Between a Residence and a Domicile?

A residence is a location where you may live part-time or full-time. A domicile is your legal address, and your domicile is located in the state where you pay taxes.

How Do I Know My Domicile?

You will know your domicile because it will be the state and location you consider your permanent home. It's the location where you probably maintain your social, economical, and family ties. Your domicile is also the place where you pay taxes, vote, and have a driver’s license.

What Are the Types of Domicile?

Domiciles can be any house or apartment, condominium, or co-op. It is the place where you plan to live indefinitely. You can have more than one residence, but your domicile is your "forever" home.

What Is My Tax Domicile?

Your tax domicile is your permanent home where you pay your state income tax.

The Bottom Line

You may live in many places or even own multiple homes but you can only have one domicile when you reach the age of majority. Previously, your domicile is the home you share with your parent or legal guardian. It is possible to relocate to a new domicile, but it takes time and effort to establish a legal intent to make your new domicile your permanent home. It is the location where you register your car, your pet, your vote, and pay your state taxes.

A legal term, domicile is defined by the state or country and its courts have?jurisdiction to administer your estate, probate your will when you die, and assess your state income taxes. In addition, your legal domicile informs your child support and alimony in the case of a divorce.

Article Sources
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  1. Internal Revenue Service. "Publication 555, Community Property," Pages 2–3.

  2. Internal Revenue Service. "25.18.1 Basic Principles of Community Property Law: Domicile."

  3. Bloomberg Tax. "US Estate Tax Liabilities Vary Based on Your Domiciliary Status."

  4. Internal Revenue Service. "Address Changes."

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