We present the first spectropolarimetric observations of the symbiotic nova HM Sge. We first note that marked spectral changes occurred: in the near IR the spectrum of the Mira in the system has clearly appeared. The nebular emission line spectrum remains largely unchanged but we detect for the first time the Raman line at lambda 6825. These changes indicate that the dust content in HM Sge is rapidly decreasing and that the dust obscuration period which began in 1985 has come to an end. In terms of polarization we find that the red giant spectrum is intrinsically polarized at the 0.5 % level and the polarization signal is structured across the TiO absorption bands. The Raman scattered O vi line at lambda 6825 shows a polarization of 3.4 % at an angle of 33 deg. The behaviour of the polarization angle across the Raman line strongly indicates that an axisymmetric O vi-H i scattering geometry prevails. The distribution of the neutral hydrogen in the inner binary system does not seem to be strongly perturbed by binary motion. We conclude that the present binary axis is orientated at a position angle of ~ 123 deg. The deduced orientation of the binary axis of HM Sge is parallel or perpendicular to distinct geometric features of the surrounding nebulosity. This indicates that the orientation of the binary system is of prime importance for the understanding of the nebular structure. Based on observations taken with the 4.2m William Herschel Telescope at La Palma and the 2.3m ANU Telescope at Siding Spring.