‘Death Tax’: Inheritance Fees for Victorians Soar 650 Percent

The opposition has described this move as ‘death taxes by stealth’ while noting concerns with elder abuse.

Headstones can be seen on graves at the Korumburra General Cemetery in Korumburra, Victoria of Australia, on Nov. 3, 2023. Mell Chun/AFP via Getty Images

Victorian Labor will slug families of deceased relatives with major fee hikes to process wills for estates worth more than $250,000.

The new fees, listed by the Supreme Court of Victoria, are flagged to apply from Nov. 18, 2024, impacting families dealing with multi-million dollar estates.

The fees are normally paid when the Probate Office must process a deceased individual’s will and estate, which can include property.

Under the changes, the government will charge $514.40 (US$339) for estates of between $250,000 and $500,000, up 650 percent from the current fee (pdf) of $68.60.

Meanwhile, costs on estates between $500,000 and $1 million will increase 180 percent from $367.40, to $1,028.80. The median dwelling value in Melbourne is $776,044, according to CoreLogic, but this is likely to rise in future.

The fees for estates between $1 and $2 million will surge 250 percent from $685.90 to $2,400.50, while costs on fortunes between $2 and $3 million will rise 220 percent from $1,502.40 to $4,801.

In a post to social media, Victorian Opposition Leader John Pesutto called the move a “death tax by stealth”—as the changes were made just before the Melbourne Cup public holiday on Nov. 5.

“This government will stop at nothing to raid the pockets of dead Victorians and grieving families because Labor can’t manage money,” he said on Instagram, noting concerns with elder abuse.

Shadow Attorney-General Michael O'Brien shared a similar view.

“This is not about cost recovery, because we know that the Probate Office will take in about 1,000 percent more fees than it costs to run,” he told reporters.

“To have massive increases in the amount of money that grieving families have to pay when a loved one dies to get probate can’t be justified,” he added.

Bigger Estates to Pay More, Poorer Sectors to Pay Nothing

Currently, estates with a gross value over $3 million attract a $2,318.90 fee.

However, under the changes announced by the government, new fee brackets will be introduced.

An estate worth $3-5 million will now be charged $7,185.20 under the new system, while a $5-7 million estate will be slugged $12,002.60, and a $7 million plus estate will incur a fee of $16,803.60.

On the flip side, families with estates worth less than $250,000 will now be able to process the will for free.

Process Behind the Change

In June and July, the Department of Justice and Community Safety held a consultation on the proposed increase.

In a statement of reasons (pdf) published in November, a majority of submissions did not back an increase in fees.

“A total of 124 survey responses and 8 submissions were received in the public submission period. When participants were asked if they support the proposed changes to Probate Office fees, 94 percent indicated ‘no,’” the government said.

One response noted: “The proposed increase in fees will cause financial distress for clients and small and medium sized businesses and practices, and creates a risk that individuals will not seek the professional advice they need.”

Following this feedback, the government acted to remove the fee for estates valued at less than $250,000, and reduce fees for those under $7 million.

The government noted the changes would see Victoria charge less in probate fees compared to New South Wales and South Australia for estates under $2 million—which encompasses 89 percent of all estates.

“The proposed regulations will reduce fees for people with a lower capacity to pay, especially when the proceeds from an estate are less than $250,000,” the government said.

“Court fees should reflect the private benefit that people receive from using the court system. Where there is more work done, or greater benefit, fees should reflect this.”

Elder Abuse Concerns

The government also noted that several submissions raised concerns it could stoke “elder abuse”—already an ongoing problem with elderly Australians potentially being pressured to transfer their assets prior to death to avoid certain fee thresholds.

In response, the government said they accepted this concern, but noted elder abuse was a criminal offence that should be reported to police.

“In relation to the proposed probate fee, financial abuse is mostly likely to occur for assets such as cash, where the cost to transfer the asset is minimal.”

AAP contributed to this article.