Quick stats
- The average inheritance in Australia is $125,000 and the average recipient is over 50 years old.
- Over the past 20 years, Australians have given almost $1.4 trillion in inheritances.
- Baby boomers (aged 55–74) make up 21% of the population but own 49% of national wealth.
- Baby boomers are expected to pass on an estimated $224 billion in inheritances per year by 2050.
- Over $100 trillion (US$68 trillion) in assets globally are expected to be passed on by baby boomers to their children.
- Australia does not have any inheritance or estate taxes. 24 out of 38 OECD countries such as the US and UK have an inheritance tax.
The world is on the cusp of what's being called the "great wealth transfer". As wealthy baby boomers (people born between 1946 and 1964) reach the end of their lives, they're expected to pass on more than $100 trillion worth of assets to their children.
This wealth transfer is expected to have a sizeable economic impact in Australia too. So, what's the average inheritance in Australia, and how much is that expected to grow in the decades ahead? Let's look at some key inheritance statistics in Australia to find out.
The average inheritance in Australia
- According to the Productivity Commission, the average inheritance in Australia is about $125,000 and average recipient is around 50 years old.
- Australians have given almost $1.4 trillion in inheritances over the past 20 years – that's about $67 billion a year.
- Australians passed on $107 billion in inheritances in 2018, this is approximately 6% of gross national income.
- The annual value of wealth transfers has more than doubled since 2002, thanks to Australians accumulating more wealth.
- According to a study by Perpetual, the 3 most popular ways to use an inheritance are to invest (30%), pay off the mortgage (28%) and share it with the family (19%).
Inheriting money from overseas
How is inheritance taxed in Australia?
- Inheritance and estate taxes were abolished in Australia in 1979 to prevent the outflow of capital.
- Other developed countries that do not tax inheritance include Canada, Hong Kong, Malaysia, Mexico, New Zealand, Norway and Singapore.
- 24 out of 38 OECD countries have an inheritance tax, including the US, UK, France, Japan and South Korea.
- In Australia, tax obligations arise if you dispose of an inherited asset and trigger a capital gains tax event, or if you earn income from shares or property you inherit.
- In 2019, among the 24 OECD countries that levy inheritance, estate and gift taxes, revenues from these taxes exceeded 1% of total taxation in only 4 countries (Belgium, France, Japan and South Korea).
Upcoming inheritance boom
- The total amount of inheritances is projected to increase almost fourfold between 2020 and 2050.
- Baby boomers are expected to pass on an estimated $224 billion per year by 2050.
- It's estimated that $3.5 trillion in assets will be transferred to the next generation over the next 2 decades. That's an average of $175 billion per year.
- Australia's ageing population, falling fertility rates and increased housing and super wealth are expected to drive the inheritance boom.
- Property, superannuation and other investments will make up the bulk of assets handed down to the next generation.
- Globally, this phenomenon is being referred to as the "great wealth transfer".
- Over $100 trillion (US$68 trillion) in assets globally are expected to be passed on by baby boomers to their children.
Wealth and income across households and generations
- The average full-time salary in Australia is $97,510 and the average gross annual household income is $121,108.
- Analysis from McCrindle Research shows that the poorest 20% of households own just 1% of Australia's national private wealth, while the top 20% own 63%.
- Gen Y (aged 25–34) makes up 15% of the population but owns just 5% of national wealth.
- Baby boomers (aged 55–74) make up 21% of the population but own 49% of national wealth.
- Gen X (aged 35–54) makes up 27% of the population and own 28% of national wealth.
- Builders (aged 75+) make up 7% of the population but own 18% of national wealth.
Suburbs where kids will inherit over $3 million
Research from Philanthropy Australia and Seer Data into intergenerational wealth transfer revealed the 10 Australian postcodes where the next generation are set to gain the largest inheritances. Here are the suburbs with the highest forecast average wealth transfer per household for the period 2021–2030.
- Rose Bay-Watsons Bay, NSW: $3.75 million
- Toorak, Victoria: $3.30 million
- Lindfield-Roseville, NSW: $3.29 million
- Wahroonga (east) – Warrawee, NSW: $3.29 million
- West Pennant Hills, NSW: $3.24 million
- St Ives, NSW: $3.20 million
- Woollahra, NSW: $3.20 million
- Glenhaven, NSW: $3.09 million
- Brighton, Victoria: $3.08 million
- Gordon-Killara, NSW: $3.08 million
Average inheritance by country (AUD)
- Between 2016 and 2019, the average inheritance in the US was US$46,200 (approximately $69,800 in 2023).
- The median inheritance amount in the UK between July 2014 and June 2016 was £11,000 (approximately $21,100 in 2023).
- Across 16 OECD countries, the average inheritance or gift received by the poorest households ranged from US$295 (Latvia) to $US11,052 (Belgium). For the wealthiest households, the average inheritance or gift ranged from US$30,441 in Hungary to US$525,879 in Austria.
