Inheritance Fees for Victorians Skyrocket 650 Percent: The Rising Costs of Estate Taxes
The opposition has described this move as ‘death taxes by stealth’ while noting concerns with elder abuse.
Victorian Labor will implement significant fee increases for processing wills for estates valued at over $250,000, which the opposition has dubbed as ‘death taxes by stealth.’
The new fees, outlined by the Supreme Court of Victoria, are set to take effect from Nov. 18, 2024, impacting families managing multi-million dollar estates.
These fees are typically paid when the Probate Office needs to handle the will and estate of a deceased individual, which may include property.
Similarly, fees for estates between $500,000 and $1 million will rise 180 percent from $367.40 to $1,028.80. Melbourne’s median dwelling value is $776,044 as per CoreLogic, but is expected to increase in the future.
Estate fees between $1 and $2 million will surge by 250 percent from $685.90 to $2,400.50, while costs for estates between $2 and $3 million will increase by 220 percent from $1,502.40 to $4,801.
Opposition Leader John Pesutto referred to the move as a “death tax by stealth” in a social media post, expressing concerns about elder abuse amidst the changes announced right before the Melbourne Cup public holiday on Nov. 5.
Shadow Attorney-General Michael O’Brien echoed similar sentiments, stating, “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.”
Bigger Estates to Pay More, Poorer Sectors to Pay NothingCurrently, estates valued over $3 million face a fee of $2,318.90.
However, under the government’s announced changes, new fee brackets will be introduced.
An estate valued at $3-5 million will now be charged $7,185.20 under the revised system, while estates between $5-7 million will incur a fee of $12,002.60, and those over $7 million will face a fee of $16,803.60.
Conversely, families with estates below $250,000 will now have the will processed for free.
Process Behind the Change
In June and July, the Department of Justice and Community Safety conducted consultations on the proposed fee increase.
Following the feedback, the government decided to eliminate the fee for estates valued under $250,000 and reduce fees for those under $7 million.
The government highlighted that Victoria’s probate fees for estates under $2 million would be less than those in New South Wales and South Australia, covering 89 percent of all estates.
The government justified the changes by stating, “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 acknowledged concerns raised by some submissions regarding a potential increase in “elder abuse,” particularly concerning elderly individuals being pressured to transfer assets before death to avoid certain fee thresholds.
In response, the government emphasized that elder abuse is a criminal offense that should be reported to the police.
AAP contributed to this article.
