It is common for luxury buyers in this region to end up owning property in more than one state — a primary home in Philadelphia or the Main Line paired with a place at the Jersey Shore, or a Pennsylvania residence alongside a South Jersey property purchased for family or investment reasons. Once a household has meaningful ties to two states, questions about tax residency and domicile tend to follow. This is a genuinely complex area of state tax law, it changes over time, and the right answer depends on a household’s specific facts — so this article explains the concepts buyers should understand and the questions worth raising with a qualified accountant or tax attorney, rather than offering specific tax advice.
Domicile vs. Residency: Two Different Questions
Domicile generally refers to the one place a person considers their permanent home — the place they intend to return to, even after time away. Residency, by contrast, is often about where someone actually spends their time and maintains a home, and a person can be a legal resident of more than one state for tax purposes even though they can only have one domicile. States use different tests to determine both, and the distinction matters because it can affect which state taxes a household’s income, and in some cases how a household’s estate is taxed after death.
Why This Matters for Owners of a Philadelphia Home and a Shore or Suburban Second Home
For a household with a primary residence in Pennsylvania and a second home in New Jersey — or the reverse — the stakes usually involve state income tax exposure. A state that considers a taxpayer a resident may seek to tax all of that person’s income, not just income earned within the state, while a non-resident is typically taxed only on state-source income. For high-income households, the difference between resident and non-resident tax treatment in a second state can be significant, which is exactly why this deserves proactive planning rather than an assumption that “the house we live in most of the year” automatically settles the question.
The General Idea Behind Day-Count Tests
Many states, including Pennsylvania and New Jersey, use some version of a statutory residency test that looks at both the number of days spent in the state during the year and whether the taxpayer maintains a “permanent place of abode” there. A commonly referenced threshold in many states’ rules is around 183 days, though the exact rule, definitions, and exceptions vary by state and can change, so this should be treated as a general concept to discuss with a professional rather than a number to rely on directly. Simply owning a second home does not automatically make someone a statutory resident of that state — the analysis typically also depends on how much time is actually spent there.
Evidence States Look At
When domicile or residency is contested, states typically look well beyond day counts. Voter registration, driver’s license and vehicle registration, where a person’s primary doctor, accountant, and place of worship are located, the address used on a will or estate planning documents, where children attend school, and where a person’s most significant personal and business relationships are centered can all be considered. Households that want to establish or maintain a particular domicile should be consistent across all of these details, not just the address on a tax return.
Property Tax Is a Separate Issue
It is worth distinguishing this from local property tax, which is assessed by the municipality where a property sits and applies regardless of a household’s residency or domicile status. Owning a second home in New Jersey means paying New Jersey property tax on that home no matter where the household is domiciled for income tax purposes. Some jurisdictions also offer homestead exemptions or other primary-residence property tax benefits that are unrelated to state income tax residency rules and have their own separate qualification requirements.
Building a Record Over Time
Because residency and domicile questions can come up years after a purchase — sometimes triggered by an audit following the sale of a home or a significant change in income — it is worth keeping organized records from the start: utility bills, calendars or credit card statements that help establish time spent in each state, and copies of any state tax filings. This is far easier to assemble proactively than to reconstruct after the fact.
Frequently asked questions
If I buy a second home in New Jersey, does that automatically make me a New Jersey tax resident?
Not automatically. Residency generally depends on factors like how many days are spent in the state and whether a permanent place of abode is maintained there, not simply on owning property. A tax professional can evaluate a household’s specific situation against current state rules.
Can I be considered a resident of both Pennsylvania and New Jersey at the same time?
It is possible for a household to have residency-related tax obligations in more than one state depending on the specific facts, which is part of why this situation benefits from professional guidance rather than assumptions.
Does this affect the property taxes I pay on each home?
No — local property tax is based on where each property is located and its assessed value, and applies regardless of a household’s state income tax residency or domicile status.
James Kennedy works with buyers and sellers across Philadelphia and South Jersey who own or are considering property in more than one location, and can help connect you with qualified tax professionals as part of your purchase planning. Reach James at 215-267-8479 or jameskennedy@unlockedteam.com.
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