Domicile other than residence: practical and legal differences

According to the Italian Civil Code, the differences between domicile and residence are defined by article 43:

Residence:

• Definition: Residence is the place where a person has their habitual residence.
• Legal aspect: It is registered at the municipal registry office, resulting in administrative, fiscal and social effects (e.g. general practitioner, right to vote, municipal services).
• Example: If you live permanently in Milan, even if you have a house in Naples, your residence is in Milan.

Domicile:

• Definition: Domicile is the place where a person has established the principal place of business and interests.
• Legal aspect: It does not require registration at the registry office (except for specific exceptions) and is relevant for receiving legal notifications or for work reasons.
• Example: If you work in Rome during the week, but return to live in Milan on weekends, you can have your domicile in Rome and your residence in Milan.

Change of residence and domicile

The Civil Code, in article 44, establishes that: «When a person has his domicile and residence in the same place and transfers this elsewhere, in the eyes of third parties of good faith the domicile is also considered to have been transferred, if a different declaration has not been made in the deed in which the transfer of residence was reported».

This implies that the residence can be transferred separately from the domicile, or vice versa: everything depends on the will of the person and on the material elements (respectively, the habitual residence and the center of one's business and interests). One follows the other only if it is not otherwise specified in the declaration: these are, practically, the elections, or declarations, of domicile for certain categories of acts or relationships, which we mentioned in the previous paragraph.

Residence other than domicile: practical consequences

Residence is generally more "important" than domicile and prevails over it because:

• the notifications judicial or administrative documents are sent to the interested party's place of residence, unless a different domicile is chosen in another place, which must be communicated in advance (for example, in the application for participation in a public competition notice);
• for the Tax mainly residence counts, except in particular situations (for example, freelancers who live in one city and have their studio in another), and in any case the tax domicile must be specified in the appropriate declarations, if different from the residence, otherwise it coincides with it;
• residence determines the municipality of registration in electoral lists (therefore conditions the exercise of the right to vote in local elections) and access to a multiplicity of public services, like the healthcare (general practitioner) and the school, as well as to enjoy a series of concessions, such as those provided by local authorities (Municipalities, Provinces and Regions) which (except in exceptional cases) condition the benefits on the place of residence, not on the domicile.

First home benefits: does residence or domicile matter?

For the purposes of tax breaks on the first home, the essential element is residence, not domicile.

We remind you that among the necessary requirements established by law there is that of transfer residence (if you don't already have it there) in the municipality where the property subject to the subsidized purchase is located within 18 months from the date of signing of the notarial deed of sale, and a specific document must be contained in this deed declaration of commitment. We also specify that the residence must be established in that Municipality, and not precisely in the property purchased with the benefits.

If you do not transfer residence within those 18 months, benefits are lost already granted at the time of purchase: theRevenue Agency revokes benefits and requests payment of the tax difference due (therefore the percentage saved, for example the registration tax paid at 2% instead of 9%, or, if you buy from a company, the VAT paid at 4% instead of 10%) plus interest and penalties.

Therefore, have, or transfer, sole domicile in the Municipality where the property is located it's not enough to enjoy the benefits, and on the other hand nothing prevents those who have established their residence in that Municipality - thus respecting the regulatory provisions - from having, or subsequently placing, their domicile (or even several different domiciles for their various affairs) elsewhere.

If I change my domicile while maintaining my residency, will I lose the benefits?

In practice, if you bought your first house with the benefits you necessarily have to transfer residence within 18 months in that Municipality (after this deadline you can also establish it elsewhere); domicile does not affect neither on the achievement, nor on the loss, of such benefits.

Therefore you can freely move your home (before or after the purchase, and also during the aforementioned 18 months or at a time following their completion) without fear of losing the tax bonus on the purchase of your main home.

Is domicile valid for the IMU exemption?

To obtain theIMU exemption on first home - understood as the taxpayer's main residence - it is necessary to have one's residence fixed in the property (and not generically in the municipality in which it is located, as happens for the incentives for the purchase of the first house that we examined above), and, furthermore, it is also necessary that the owner lives permanently in that house, i.e. that it constitutes his or her actual habitual residence.

In all this, domicile doesn't matter: on the one hand it is not necessary, because registered residence is required, and on the other it is not enough, because habitual residence is necessary (which domicile does not require at all).

Finally, we specify that if i spouses they have different residences in properties located in the same Municipality the IMU exemption applies only to one, but if their residences are located in different Municipalities a historic ruling of the Constitutional Court, n. 209 of 2022, allows you to have the IMU exemption for both, if each of them constitutes your habitual residence. According to the Consulta, in fact, it cannot be assumed that a family unit must have a single and exclusive main home, because the needs of life, work and health can lead the spouses to live in different municipalities. Even in this situation, however, domicile has no relevance.