What is a “Permanent Home”?
When it comes to the determination of tax residency, one fundamental concept that plays a crucial role is that of a “Permanent Home”. The notion of a “Permanent Home” can easily be defined as: Any form of home that may be considered (house or apartment belonging to or rented by the individual, rented furnished room). However, the permanence of the home is essential; this means that the person has arranged to always have the home available to them without interruption, not just occasionally for short stays like vacations, business trips, or attending a course at a school. For example, a house owned by a person cannot be considered available to them during a period when the house has been rented out and given over to someone else, so the person no longer has control of the house or the ability to stay there.
A person can have more than one permanent home, and one home can be permanent for more than one person.
What is qualified as a Permanent Home, and what is NOT?
Accordingly, a permanent home is a residence that meets all three criteria and will not be given up during terms of absence:
Uninterrupted Availability: The home must be accessible to you at all times, without restrictions or gaps. Staying with a friend gives you access but with restrictions, so this does not become a permanent home.
Exclusive Control: You retain legal or practical authority to use the space (e.g., ownership, long-term lease, practical authorization). Staying with your parents-in-law and signing contracts for internet service, cleaning and deciding on renovations will create a permanent home, even though it is within the parents-in-law's permanent home.
Non-Temporary Use: The home is not reserved for short-term stays (e.g., vacations, business trips, or courses), but rather intended for regular use, meaning the employee resides there habitually, rather than just visiting occasionally.
Examples:
John works and has his payroll in Germany. However, he spends a significant amount of time in the Netherlands. He just bought an old farmhouse and is renovating that. He has permanent residences in both countries.
Giuseppe, an Italian student, goes on a semester abroad to Norway and rents an appartement. After the semester, he returns to Italy but retains the apartment there. He continues to pay rent, showing an ongoing financial commitment to the property, stores his personal belongings there, indicating that it is a primary living space rather than just temporary accommodation, and he can return freely at any time, reinforcing that the apartment remains a permanent home, despite being physically away. So, while mainly residing in Italy, Giuseppe is considered as having an additional permanent home in Norway.
Marwa works in Germany travels for workation to Egypt, where she is staying with her husband, who lives in a long-leased apartment, and children who are in Egyptian schools. She has a permanent residence in Egypt, that is used by her family.
Francisca works and lives in Austria. She has still a dedicated childhood bedroom at her parent’s house in France, where she regularly stays at for visiting her family and friends. She frequently travels to France for Art projects and pays some rent as well as utilities to her parents.
What Does Not Qualify as a Permanent Home Abroad?
Not all living arrangements abroad meet the criteria of a permanent home. A residence does not qualify as a permanent home if it is temporary, occasional, or lacks a strong residential connection, such as:
Temporary living arrangements.
Shared or conditional spaces.
Vacation homes.
Short-Term rentals.
Examples:
Khan, an Indian working in Germany, is visiting his parents or in-laws in India and staying in the children's room with no intent to live there, and they have no intent of him/her being there permanently.
Rented Out: An owned cabin in Sweden leased to tourists during summer months (you lose access during rentals).
A Tokyo apartment leased for a 3-month internship, with no option to renew or return afterward.
Frank is assigned a furnished housing for a short project in Serbia, and he does not have personal control over it.
Gray Areas and Misconceptions
Myth: “Owning a property abroad automatically makes it permanent.”
Reality: If the home is rented out, occupied by others, or reserved for vacations (by the intent), it does not qualify.
Myth: “Frequent visits make a home permanent.”
Reality: Access must be uninterrupted and unconditional, not based on the amount of occasional stays.
Myth: Marek, a Polish citizen, works in the UK but frequently stays at the parents’ house in Warsaw on visits. It is assumed to be a permanent home for Marek. Reality: While Marek can stay there always and does occasionally, he does not financially maintain the home, and the primary life (work, taxes, social ties) is in the UK. Since the parents control the property, it is not Marek’s own permanent home.