Millions of Aussies to be slugged with ‘stealth death tax’

Victoria residents are facing huge increases in fees for processing the estates of family members. This is sometimes called a ‘stealthy death tax’.

Prime Minister Jacinta Allan’s government is considering changes that would mean families would in some cases have to pay thousands of dollars in probate fees to have their wills approved by the High Court.

The changes are expected to generate an additional $33.6 million in revenue for the court, which is 1,086 percent more than the cost of running the probate office. The Herald Sun reported.

The current probate fee in Victoria is $68.60 for estates worth less than half a million dollars.

But under the proposed changes, this could rise by 281 percent to $261.30 for estates valued up to $250,000.

For estates valued between $250,000 and $500,000, the fee can increase by as much as 650 percent to $514.40.

For estates between half a million and a million dollars, the fee can increase from $357.40 to $1,028.80, or 180 percent.

And for estates valued between $1 million and $2.5 million, families may have to pay $2,563.80 – a 273 percent increase from the current fee of $685.90.

Premier Jacinta Allan said the rate increases had not yet been finalised and that for estates under $500,000 the desired rate changes would make them cheaper

Prime Minister Jacinta Allen defended the inquiry, saying the rate increases had not yet been confirmed.

“The preferred option being considered would result in probate fees being significantly reduced for a large number of people who require this service,” she said.

“There’s been a bit of fear mongering and fear mongering and frankly just ridiculous commentary about this from the Liberal opposition.”

But Opposition Attorney-General Michael O’Brien criticised the inquiry, saying it was a return to the inheritance tax that was abolished in Victoria in the 1980s.

He said under the changes Victorians could pay the government a maximum of $15,407.40 to claim their inheritance.

In NSW the maximum probate fee is less than half of $6652.

“This massive increase in inheritance tax is nothing less than Labour secretly reintroducing inheritance tax,” O’Brien said.

“Even dying is not enough to save Victorians from the Labor Party’s desperate push for new taxes,” he said.

‘People work hard and pay taxes their whole lives. It shouldn’t be the case that they have to pay taxes again after they die.

‘This Labor government should be ashamed of itself, but it shows how badly they have mismanaged Victoria’s finances.

‘Given that the current probate payments are expected to run until 2028, this is nothing more than a dirty cash grab by a bankrupt Labour government.’

The opposition has said the increases are a return to the “unfair” inheritance taxes paid to the government that were abolished in 1981.

The Ministry of Justice and Security, which conducted the study, concluded that increasing the fees would improve the overall cost recovery of the Supreme Court.

A government spokesman said the review was not yet complete and residents could still submit comments.

‘Probate fees in Victoria are significantly lower than in other states. They do not adequately cover the costs of High Court hearings and any change would still mean average fees would be lower than fees in New South Wales or South Australia,” the judge said.

“The preferred option would also make it cheaper for many people – especially if the proceeds from an estate are less than $500,000.”