Transferring property from a deceased estate in Victoria

When someone dies, the property title is rarely the first thing on anyone's mind. It usually surfaces a few weeks later, when a bank or an accountant asks who owns the house now.

The answer comes down to how the title was held. If they owned it with someone else as joint proprietors, it can pass to the survivor with no court involved. If they owned it alone, or as tenants in common, it forms part of the estate and the Supreme Court has to issue a grant first. Almost everything else follows from that one fact.

Start with the title, not the will

A Victorian title records co-owners in one of two ways, and they behave very differently on death.

Joint proprietors

Joint proprietors (most people say joint tenants) hold the whole property together rather than in separate shares. When one dies, their interest passes to the survivor by right of survivorship. The will does not control it. A clause leaving "my half of the house" to somebody has no effect on a property held this way.

The Supreme Court of Victoria states the consequence plainly: "If real estate is held jointly then an application may be made to the Land Titles Office to transfer the property to the survivor's name". No grant of probate is needed for that step.

Tenants in common

Tenants in common each hold a defined share, written on the title as a fraction. That share does not pass to the other owner. It becomes an asset of the estate and goes wherever the will sends it, or wherever the intestacy rules send it if there is no valid will.

Here the Court is unambiguous. It lists "whether the deceased owned real estate either solely or as a tenant in common" as a case where "a grant is always required".

Get a copy of the title and read how the ownership is recorded before you plan anything. People are often certain they know, and the title says otherwise. A couple who bought in Clyde North a decade ago may be recorded as tenants in common because of how their contributions were structured then, and nobody has looked since.

Probate and letters of administration, and why we do not do them

A grant is the Supreme Court's confirmation of who has authority to deal with the estate. The Court issues three types:

1. Grant of probate. To the executor or executors named in the last valid will.
2. Letters of administration with the will annexed. Where there is a valid will but the named executor cannot or will not apply.
3. Letters of administration. Where there is no will, or the will is not valid. Usually granted to the closest surviving next of kin.

It takes longer than most families expect. The intended application has to be advertised first, and the Court requires at least 15 days after publishing that advertisement before the application can be filed. The Probate Office describes review as "5-10 working days", while noting on the same page that applications are running longer than that.

Applying for a grant is not conveyancing work, and a licensed conveyancer cannot do it. The Victorian Legal Services Board lists what falls outside conveyancing work under section 4 of the Conveyancers Act 2006, and "applying for a grant of probate or letters of administration" is on that list. We are licensed by the Business Licensing Authority and regulated by Consumer Affairs Victoria, which also publishes the difference between a conveyancer and a legal practitioner. Preparing the probate application, advising on whether a will is valid, or acting where the family disagrees is a solicitor's job.

Better to hear that on the first phone call than three weeks in. More on where the line falls in our piece on choosing between a conveyancer and a solicitor.

What the conveyancer does

Once the ownership question is answered, the land registry work is ours. Four jobs, and which apply depends on your path.

1. Survivorship application

For joint proprietors. It removes the deceased owner from the title and records the survivor as registered proprietor. It needs proof of death, and no grant. Often the only step a surviving spouse needs.

2. Transmission application

For estates. This registers the executor or administrator on the title as legal personal representative. It does not make them the owner in their own right. It gives them the standing to deal with the land, so it can be transferred or sold. It cannot be lodged until the grant has issued, so it sits behind the solicitor's work.

3. Transfer to a beneficiary

Once the personal representative is registered, the property can go to whoever is entitled under the will or the intestacy rules. This is where duty matters, and it is the core of our ownership transfers work. Family transfers outside an estate, such as a parent adding a child to a title, run under different duty rules.

4. Sale by the executor

Plenty of estates sell instead of transferring, because one house cannot be split three ways. The mechanics are an ordinary sale: a section 32 vendor's statement, a contract, settlement through PEXA. What differs is that the grant must be in hand and the executor signs in that capacity. We run that alongside selling the property so the registry side does not push the date out.

Something that catches people: rates, water and insurance keep running on an empty house, and the insurer must be told it is unoccupied.

Duty on a transfer to a beneficiary

A transfer from an estate to a beneficiary is usually exempt from land transfer duty, but the exemption is narrower than most people assume.

The State Revenue Office applies section 42 of the Duties Act 2000. Two conditions have to hold: the transfer is made by the legal personal representative in accordance with the will or codicil, and no valuable consideration is provided.

If there is no will, the exemption can still apply. The SRO's public ruling DA-051 covers transfers made "under and in conformity with the trusts contained in a will or arising on an intestacy". The difference is the route: an intestacy transfer is lodged for complex assessment rather than as a straightforward exemption.

The same ruling reads a will strictly, and says "the terms of the will must be strictly complied with". Take a will that leaves the house to one child on condition they pay a sum to a sibling. Pay less than the will says, and the transfer becomes fully dutiable.

The evidence the SRO wants is specific. Its evidentiary requirements for this exemption call for a digital duties form, the sealed grant with the will attached (letters of administration and the affidavit for an intestate estate), a statutory declaration from the executor about entitlement and consideration, and evidence of value from an agent's appraisal with a rates notice or a certified practising valuer. The same page says to lodge "30 days before settlement through Duties Online", which is why we ask for the grant and the will early.

Complex assessment is not a refusal, just a slower road, and far better known at the start than a fortnight before settlement.

Land tax while the estate is being sorted out

There is a clock on this one, and it catches estates that drag.

The SRO's rules on deceased estates and land tax set a concessionary period running to the earlier of the third anniversary of the date of death, a further period approved by the Commissioner, or completion of administration. Miss it and the surcharge rate applies. Where the property was the deceased's principal place of residence, a separate PPR concessionary period runs to the earlier of the third anniversary of death or the day the deceased's interest vests in the beneficiary. If administration is not completed by then, the SRO's position is that the PPR exemption ceases and the land becomes taxable.

Three years sounds like plenty. It stops sounding like plenty when a will is contested, or when a beneficiary lives overseas and every signature takes a month. Land tax is not something we advise on, so speak to your accountant or the SRO.

Common questions

Do we need probate if the house was in both our names?

Usually not. If the title records you as joint proprietors, the interest passes to you as the survivor, and a survivorship application records that at the land registry. The risk is in assuming. Where the title says tenants in common, the Supreme Court's position is that a grant is always required.

Can you apply for probate for us?

No. Applying for a grant is not conveyancing work, so a licensed conveyancer cannot do it. Choose a solicitor for the grant, and we will pick up the title work as soon as it issues. If you do not have one, tell us and we will point you to solicitors we deal with across the south east.

How long does the whole thing take?

Two clocks. The grant is the slow one: at least 15 days after the advertisement before the application can be filed, then a review the Probate Office puts at 5 to 10 working days, while noting current applications run longer. The registry work afterwards is normally weeks rather than months.

The will leaves the house to three of us and only one wants to keep it. What then?

That is exactly where the exemption stops being straightforward, because the one keeping it is usually paying out the other two. The SRO looks at what each beneficiary was entitled to and what each actually received. Get the duty position confirmed before anyone commits to a number. If you disagree about the property itself, that is a conversation for a solicitor.

When you are ready, we are here

There is no rush at our end. Send us a copy of the title whenever you are ready and we will tell you which path you are on. Sometimes a survivorship application is all you need.

Our office is at Office 4, Level 1, 105A High Street, Cranbourne, open Monday to Friday, 9am to 5pm, and available on weekends by appointment. We act across Cranbourne, Clyde North, Berwick, Narre Warren and the rest of the corridor, and because Victorian conveyancing settles electronically through PEXA we can act anywhere in the state. Call 0450 016 397, email convey@wisestep.com.au, get in touch or ask us for a quote.

This article is general information about Victorian conveyancing and is not legal advice for your particular transaction. Speak to us about your specific circumstances.