Aussies to be left hundreds of dollars out of pocket as ‘tax by stealth’ hits Victoria

Grieving Victorian families will soon have to pay a sevenfold increase in death charges – on top of hefty taxes to finance Melbourne’s Covid lockdowns.

Victoria formally abolished all death duties in 1981.

But those mourning the death of a loved one still have to pay a probate filing fee to the Supreme Court to cover the administrative costs of transferring or dividing up a deceased estate among surviving family and friends.

The costs for processing the legal claims via a solicitor had, until now, been modest in Victoria for the relatives of a deceased loved one who had left behind a typical suburban home.

But now the deceased estate costs will be in the hundreds for a small apartment estate, climbing into the thousands for an average, Melbourne house, and into the tens of thousands for homes sold in more upmarket areas.

Fees are meant to increase on July 1 each year, but Victorian probate office fees are now set to soar just four months into the 2024-25 financial year. 

Shadow attorney-general Michael O’Brien described the increases as a ‘death tax by stealth’.

From November 18, estates worth less than $500,000 will incur a probate fee of $514.40 – an expense that will be 7.5 times more expensive than the existing fee of $68.60.

Estates valued from $500,000 to $1million will incur a $1,028.80 charge – almost triple the existing level of $367.40.

That kind of cost increase would affect a family selling a median-priced Melbourne house worth $928,808 or an apartment with a middle price of $613,638, based on CoreLogic data. 

For deceased estate assets worth $1million to $2million, the fee will be $2,400.50 – up from $685.90.

The fee for estates worth more than $2million but less than $3million will be $4,801.00 – up from $1,502.40.

On estates worth $3million to less than $5million, the fee jumps to $7,185.20 – a tripling from $2,318.90. 

Acting Attorney-General Enver Erdogan on Monday also announced new fees for the ultra rich.

‘For the very small percentage of Victorians dealing with multimillion dollar estates, the fees will be lifted to cover the level of administration and dispute resolution these complex applications often require in court,’ he said.

That means estates worth $5million to $7million will incur a $12,002.60 fee, rising to $16,803.60 for estates worth more than $7million.

Mr O’Brien, a former Liberal leader, said the increases were a poor reflection on Premier Jacinta Allan, with her state set to have a $2.2billion Budget deficit in 2024-25.

‘For the Allan Labor government to resort to taxing dead Victorians and their grieving families, and to announce it on the eve of Melbourne Cup, just shows you how bankrupt this government is – financially and morally,’ he said.

Victoria’s Labor government last year introduced a series of taxes on businesses and property investors in a bid to raise $31.5billion over a decade to pay for Melbourne being the world’s most locked down city during Covid.

The Opposition said said the increases were a poor reflection on Premier Jacinta Allan, with her state set to have a $2.2billion Budget deficit in 2024-25

This included a $975 land tax on property investors.

The federal government abolished inheritance taxes in 1979, taking the lead from Queensland.

Other states copied in the following years, with all states scrapping death duties by 1982 in a bid to stop the elderly and the wealthy from moving interstate. 

Every state, levies probate fees with the amounts varying depending on the size of an estate.

While Victoria’s probate fee increases are steep, other states charge even more.

New South Wales charges $1,873 for estates worth $500,000 to $1million and $2,494 for estates valued at $1million to $2million. 

South Australia charges $1,914 for estates worth $200,000 to $500,000, $2,549 for estates worth $500,000 to $1million and $3,826 for estates worth more than $1million. 

Tasmania charges $1,024.76 in fees for estates valued at $250,000 to $500,000, $1,290.30 for estates worth $500,000 to $1million and $1,634.38 for estates worth $1million to $2million. 

Queensland has a flat filing fee of $793 while in Western Australia it’s $408.