What Is a Domicile?

Your domicile is the place where you maintain a permanent home. 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.

Understanding Domicile

At birth, your domicile of origin is the home you share with your parents. This location remains your domicile until you reach the age of majority and acquire a domicile of choice. This domicile of choice remains your domicile until you abandon it by relocating 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.

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

Residence vs. Domicile

You may have heard residence and domicile 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 proscribed 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.

Special Considerations

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

The 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, Maine is their residence and domicile, and Florida is their residence but not their domicile.

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 you live and spend time.

Legally, 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, surrendering your driver’s license, removing 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 payment of alimony and child support.

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. Often upper-income taxpayers will domicile in a state which has the lowest tax liability for them.

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, indicia of residence, like owning real property, or indicia of domicile, like failing to abandon your old domicile properly, can subject you to taxes in more than one state.