DEFINITION of Home
Home is the place of permanent residency where a person lives, or intends to return to live. A home is also a physical domicile or residence where a person resides.
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BREAKING DOWN Home
Home has specific legal connotations, as it is used to determine many things from tax liability to a person’s status in the country they reside in. It can also be used to determine which states probate laws are followed, a state’s rights when it comes to collecting taxes and in determining citizenship when a person resides in a different country than where they were born.
If a person owns more than one dwelling, like a vacation home or an investment property for example, their primary residence is the location that will be considered their legal home. Since a home is a legal place of residence, this will impact how their taxes are paid on that property, as opposed to their responsibility for taxes on their other properties. There are certain write-offs and deductions that can only be used on a person’s primary residence.
The type of homeowner’s insurance, hazard insurance, that a person carries on their home will also vary based on the type of occupancy. Since a home is an owner -occupied property, there will be additional coverages used. This is opposed to a non-owner occupied property that may only carry a policy that covers the building and not the contents. This would be the case with a property that is occupied by someone other than the owner, like a rental property. A renter may choose to carry their own insurance to protect their belongings.
Although a home may be vacant if a person is traveling for an extended period, or has been hospitalized, the location is still legally considered their home if there is an intention to return and they have not claimed someplace else as their legal place of permanent or principal residence.
An example of Home
For example, imagine Mary Smith owns three properties. The first is a beach house in New Jersey. She uses this property during the summer months with her children. In the winter time the property remains empty. This is her vacation home. Her second property is a condominium in New York. She rents the condominium out to Kate Jones, who pays her $1,500 a month in rent. This is her investment property. Her third and final property is in Pennsylvania. It is where she lives with her spouse and three children. Her kids go to school in Pennsylvania and she pays her state and local income taxes based on Pennsylvania’s rates. This is her home, or primary residence.
Now consider that Mary’s oldest child is ready to graduate from high school and is applying to colleges. New York state offers free college tuition to residents, or people who live in the state of New York. Although Mary owns a condominium in New York, neither she nor her kids call the state home. They will be unable to take advantage of New York’s free college tuition program. However, Kate Jones is eligible to take advantage of the state’s free tuition because even though she doesn’t own the property she resides in, she calls New York home.