Victorian Government Considers Significant Probate Fee Hike
Wills and Estates: 04 July 2024
Author: Lizia Lim - Our People
The Victorian Government is contemplating substantial changes to probate fees, with a recent paper outlining potential reform options and seeking feedback by 19 July 2024.
Proposed Changes
The "preferred proposal" includes:
- A $0 filing fee for small estates (currently estates valued at $125,080 or less).
- Significant increases for all other estates valued above $125,080, of up to 650% higher than the existing fee
- A maximum filing fee of $15,407.40 for estates valued in excess of $5 million.
These changes would make Victoria the most expensive jurisdiction in Australia for probate fees for estates valued at over $2.5 million. Currently, the maximum fee in New South Wales is $6,652 for estates over $5 million. The current fee arrangements in Victoria pay for the costs of the probate office three times over and significantly fund other parts of the court. The proposed changes are projected to increase revenue, making the probate office generate revenue ten times its operational costs.
Current and Proposed Fee Structure
The current fee is $66.80 for estates under $500,000, rising to $357.80 for estates between $500,000 and $1 million, and peaking at $2,257.80 for estates worth $3 million or more. The proposed new structure would see fees rise as follows:
- $261.30 for estates worth up to $250,000.
- $514.40 for estates between $250,000 and $500,000.
- $1,028.80 for estates between $500,000 and $1 million.
- $2,563.80 for estates between $1 million and $2.5 million.
- $7,185.20 for estates between $2.5 million and $5 million.
- $15,407.40 for estates over $5 million.
The opposition has criticized the proposal, accusing the Labor government of reintroducing death duties by stealth, a tax abolished in 1981. Shadow Treasurer Brad Rowswell commented, "There are two things in life that were certain up until today: death and taxes. But now, after 10 years of Labor, we can add one more, and that’s death taxes."
Premier Jacinta Allan responded, stating the preferred option would make probate fees cheaper for many people and dismissed the opposition's claims as fearmongering. "We have the lowest fees of anywhere in the country. We’re looking at how we can continue to support people through this process," she said.
Community consultation on the proposed fee changes will close on July 19, with a final recommendation to be made to Attorney-General Jaclyn Symes following the feedback period.
These changes could lead to a shift in how estates are handled in Victoria, potentially increasing probate avoidance as seen in other jurisdictions like the USA. The efficiency and relative affordability of the Australian probate process have previously deterred such avoidance practices.
Our Principal and head of Wills and Estates at Aitken Partners, Lizia Lim, is currently working with the Law Institute Succession Law Committee to make submissions to the Department of Justice and Community Safety to oppose the proposed fee increases and to try to ensure that probate remains accessible for everyone. We welcome any comments or submissions about the proposed fee increases, whether from lawyers, lay executors, or the general community, so that these views can be conveyed as part of the feedback process.