When someone passes away in Victoria with real property in their estate, administering that estate requires formal action — and one of the most important early steps is obtaining a professional property valuation. For executors managing a Melbourne estate, or for beneficiaries trying to understand their rights and obligations, knowing what a property valuation involves in this context is essential.
Melbourne's property market has been one of Australia's strongest performers over the past three decades. A property acquired in the 1980s or 1990s that forms part of a Victorian estate today may have increased in value by five or ten times. This extraordinary growth makes getting the date-of-death valuation right — and retaining it for future CGT purposes — particularly important for Victorian beneficiaries.
This guide explains the role of property valuation in deceased estate administration in Victoria, what a date-of-death valuation involves, the CGT implications for beneficiaries, and why prompt action protects everyone involved.
Why Property Must Be Formally Valued in a Victorian Deceased Estate
When a person dies in Victoria with real property in their name, the estate is typically administered through the Supreme Court of Victoria's Probate Office. To obtain a grant of probate (or letters of administration where there is no will), the executor or administrator must lodge an Inventory of Assets, which must include the value of all estate assets — including real property — as at the date of death.
A formal valuation from a registered Victorian valuer provides the documented, professional evidence required for the Inventory of Assets. The Probate Office and the beneficiaries' advisers require a formal, defensible assessment — not an online estimate, not an agent's opinion, and not the executor's own assessment. A registered valuer's report is the appropriate document.
Beyond probate, the date-of-death valuation directly affects the beneficiaries' financial position. For inherited Victorian property that is not immediately CGT-exempt, the market value at the date of death becomes the beneficiary's cost base. Given Melbourne's price growth, the difference between an accurate date-of-death value and an incorrect one can translate to significant CGT liability differences when the property is eventually sold.
What Is a Date-of-Death Valuation for a Victorian Estate?
A date-of-death valuation is a retrospective (backdated) property valuation — the registered Victorian valuer assesses what the property was worth on the specific date the owner died, not what it is worth when the estate is administered. In Melbourne's dynamic market, the gap between these two dates — and therefore between the two values — can be substantial.
The valuer accesses Valuer General Victoria (VGV) historical sales records to identify comparable transactions from around the date of death, assesses market conditions at that time using available market data, and prepares a documented report. The report clearly states that the value is assessed as at the date of death.
If the estate is administered promptly — within months of the death — the retrospective date is recent and the evidence is readily available. If administration is delayed — through contested wills, family disputes, or the complexity of the estate — the retrospective date may be significantly in the past, and the valuation becomes more complex and expensive. This is why commission the date-of-death valuation as early as possible in the administration is strongly recommended.
CGT Implications for Beneficiaries of Melbourne Property
The CGT treatment of inherited Victorian property depends on when the deceased acquired it and how they used it. For property that was the deceased's main residence at the date of death and was acquired post-CGT, two outcomes are possible for the beneficiary. If the property is sold within two years of the date of death, a full CGT exemption may be available. If it is sold after two years, or if it was not the deceased's main residence, the beneficiary's cost base is typically the market value at the date of death.
For Melbourne investment properties, holiday houses, and commercial properties in a deceased Victorian estate, the beneficiary's cost base is the market value at the date of death in all relevant cases. Given Melbourne's price growth, establishing this cost base accurately — through a formal date-of-death valuation — is one of the most important steps in protecting the beneficiary's financial position.
The date-of-death valuation report should be retained by the beneficiary for as long as they own the property, and potentially beyond. It is an important financial document with long-term CGT relevance — particularly for Melbourne properties that may continue to appreciate significantly over the beneficiary's ownership period.
Multiple Properties in Victorian Estates
Victorian estates frequently include multiple properties — a Melbourne family home, an investment property, a holiday house on the Mornington Peninsula, or commercial property. Each property requires its own formal valuation. Different property types, locations, and market segments require individual inspection, research, and reporting.
For estates with both real property and business assets — common in Victoria's diverse business community — the valuation scope may extend to plant and equipment and business goodwill in addition to real property. Executors managing complex Victorian estates should engage a valuation firm with appropriate multi-discipline expertise, or coordinate separate firms for the different asset classes.
Frequently Asked Questions
How do I apply for probate in Victoria if there is real property in the estate?
In Victoria, probate applications are made to the Supreme Court of Victoria's Probate Office. The application must include the original will, the death certificate, and an Inventory of Assets — which must include the value of all estate assets, including real property, as at the date of death. A formal valuation from a registered Victorian valuer supports the property component of the Inventory. Your estate solicitor will manage the probate application and will advise on what valuation evidence is required.
Can I use the council rates notice as the property value for a Victorian deceased estate?
No. Victorian council rates are based on the site value or capital improved value as assessed by the Valuer General Victoria for rating purposes. These are statutory values for local government rating — they are not market value assessments and are not appropriate for probate, CGT, or estate distribution purposes. A formal market value assessment from a registered Victorian valuer is required.
What happens if the estate property is tenanted at the date of death?
The valuer will assess the market value of the property at the date of death — reflecting its tenanted status at that date. In Victoria, properties with existing tenancies may be valued with or without the benefit of vacant possession, depending on the lease terms and the nature of the tenancy. The valuer will note the tenancy situation and explain how it has been treated in the assessment. For investment properties with existing leases, the value on a tenanted basis may differ from the vacant possession value — the appropriate basis depends on the specific circumstances and the purpose of the valuation.
How long does a deceased estate property valuation take in Melbourne?
For standard residential properties in Melbourne metropolitan suburbs, a date-of-death valuation report is typically completed within five to ten business days of instruction. Properties in regional Victoria, complex assets, or those where the date of death is significantly in the past may take longer due to the additional retrospective research required. If your probate application has a specific filing deadline, communicate this urgency to the valuation firm at the time of instruction.
