Denise and her husband bought their first investment property in the Adelaide suburb of Findon in 1998, and by the mid-2010s they owned three modest rental houses, each held in a separate discretionary trust their accountant had set up years apart — decisions made for succession planning, by their account, not tax minimisation. In late 2020, the first land tax assessment under South Australia's new rules arrived, and the number did not match anything they had budgeted for. Instead of three separate, modest bills — one per trust, each comfortably under the tax-free threshold — RevenueSA had added the three properties' land values together and taxed the combined total at a much higher marginal rate, because the state's new aggregation rules now looked through the trust structures to the underlying ownership. Denise was not the intended target of a scheme built to dodge tax; by her account, she was caught in a net cast for someone else — one of several thousand South Australian landlords whose properties, split across separate trusts on routine estate-planning advice, had quietly sat below the threshold for years.
What changed was not a new tax. South Australia has taxed land value since 1884, and land tax has been a mainstay of the state budget for as long as anyone can remember. What changed was how the tax counted an owner's total holdings. For decades, the law taxed each separate ownership structure on its own land value, running each bundle of land through the same progressive scale from the same zero base. An investor sophisticated enough to split a portfolio across five separate trusts effectively multiplied their access to the tax-free threshold and the lowest brackets by five. An investor — or a family like Denise's — who happened to hold everything in one name, or who split their holdings for reasons unrelated to tax, paid at the higher marginal rates the scale was designed to apply to large landholders. The Marshall Liberal government set out to close that gap.
What the government did
In the 2019-20 State Budget, the Marshall government announced a land tax overhaul built around a single mechanical change: aggregation. From 1 July 2020, the value of all land owned by the same owner — and, where ownership involves related corporations or an undisclosed trust, all land held across those related structures — would be added together and taxed as one holding on the state's progressive scale, rather than assessed structure by structure (RevenueSA, land tax aggregation guidance). A related trust surcharge was layered on top: land held in a discretionary trust would be taxed at a higher rate unless the trustee disclosed the beneficial owners to RevenueSA, so a trust could no longer be used simply to obscure who ultimately controlled the land and keep it off the aggregation ledger. The changes were legislated through the Land Tax (Miscellaneous) Amendment Act 2019, passed by the South Australian Parliament in November 2019 after months of negotiation with the Legislative Council crossbench, principally SA-Best, where the government held no majority (Parliament of South Australia, Legislative Council Hansard, Land Tax (Miscellaneous) Amendment Bill 2019).
Aggregation on its own would have meant a straightforward tax increase for anyone holding land across multiple structures, so the government paired it with reductions elsewhere in the scale — the price, in effect, of getting the bill through a hostile upper house. The tax-free threshold was raised, a new top threshold was introduced, and the top marginal rate was cut from 3.7 per cent to 2.4 per cent from 1 July 2020, with the top threshold set at $1,350,000 and lifted to $2,000,000 from 1 July 2022 (Piper Alderman, 24 January 2020). As tabled, the bill was projected to raise about $86 million; after the changes forced through the upper house, it was estimated to cost the government a net $39 million over three years (Piper Alderman, 24 January 2020). The government's framing was that most single-structure owners would pay much the same or less: owners with fragmented multi-structure portfolios would pay substantially more, while most single-structure owners, including most single-property investors, would pay much the same or less. The full regime was in force from the start of the 2020-21 land tax year, so the first assessments landed in the middle of the first year of the COVID-19 pandemic.
The strongest case
A loophole that let big holdings pay small-holder rates
Land tax in South Australia, as in most states, is deliberately progressive: the more land value one owner controls, the higher the marginal rate, on the reasoning that a large landholding represents concentrated wealth that can bear a higher rate without threatening a family home — the principal residence has always been exempt. Before 2020, that design could be defeated with ordinary estate-planning paperwork. Splitting a $3 million portfolio across four trusts, each holding $750,000 of land, meant each trust was assessed separately against the same zero-based scale, often paying little or nothing near the tax-free threshold and never reaching the top brackets a $3 million single holding would attract. None of this required doing anything illegal; it required only the kind of structuring advice routinely available to investors who could afford an accountant, and out of reach for a first-home buyer or a retiree with one rental property held in their own name. RevenueSA and Treasury argued, credibly, that this was a genuine equity problem rather than a manufactured one: two owners with the same total land wealth could face very different tax bills purely because of how their paperwork was drawn up, and the gap tended to favour the largest, most sophisticated holders. Aggregation, on this reading, did not raise the tax on land ownership in general — it made the existing progressive scale apply as designed, to the owner, rather than to whichever legal shell happened to hold the title.
The evidence
The aggregation change was always going to shift revenue from a specific, identifiable group — investors with multi-structure portfolios — to the state budget, and the Budget Papers bear that out, though not cleanly. Land tax revenue, which had sat in the vicinity of $600 million a year through the late 2010s (approx.; SA Budget Paper 3, various years), rose through the 2020s as the wider aggregation base combined with a second, larger force: Adelaide land values climbing through the post-pandemic property boom (Valuer-General South Australia, land value data). By the mid-2020s, successive Budget Papers under the Malinauskas government were recording land tax as one of the fastest-growing lines in own-source revenue, well ahead of the 2019-20 forecast of near revenue-neutrality (approx.; SA Budget Paper 3, Budget Statement, taxation revenue chapters, 2019-20 to 2024-25 Budgets). Treasury attributes a larger share of that growth to rising valuations than to aggregation itself, but the Budget Papers do not publish a clean split between the two, so any more precise attribution is not something the primary record currently supports.
South Australia's land tax now raises more in a single year than the 2019 reform was ever billed as designed to raise — and nobody in Adelaide's rental market is quite sure how much of that renters ended up paying for.
The critique: who actually pays
The most contested question the reform produced is not whether it worked as designed — the Budget Papers show plainly that it did, land tax revenue rose — but who ultimately bore the cost. Mainstream public finance economics treats land tax as close to an ideal tax base precisely because land cannot be moved, hidden or manufactured: taxing it does not, in the standard model, reduce the amount of land available, so in theory the burden should sit with the owner rather than pass through to the tenant. Treasury leaned on this argument during the 2019 debate, and it is not a fringe position — it broadly matches Productivity Commission and Grattan Institute analysis of land tax as one of the least distortionary taxes available to a state government. But that theory describes land, a fixed input. It says less about the number of dwellings offered for rent, which is not fixed in the same way, particularly for small-scale landlords for whom holding a rental property is a discretionary financial decision.
The Real Estate Institute of South Australia and the Property Council of Australia's SA division argued, from the outset and through the early 2020s, that the theory missed how small investors actually behave: faced with a materially higher holding cost on a multi-property portfolio, some would sell one or more properties rather than absorb the increase, and others would raise rents as far as the market would bear to cover it. Neither body has published a rigorous estimate of how many properties were sold specifically because of aggregation, as distinct from the other pressures landlords faced in the same period — rising interest rates from 2022, higher insurance costs, migration-driven demand. That gap cuts against overconfident claims either way. What is not contested is the timing: Adelaide's rental vacancy rate, which had sat above one per cent through most of the 2010s, fell to roughly 0.3 to 0.5 per cent by 2022-23, among the tightest of any Australian capital (approx.; SQM Research; REISA vacancy data), squeezing rents higher at the fastest pace in decades — a squeeze this site examines separately in its analysis of Adelaide's housing affordability. Land tax aggregation was one input into an investor's cost base among several that moved sharply in the same window. The honest reading of the public record is that it is unlikely to be the primary driver of Adelaide's rental crisis, but equally unlikely to have been irrelevant at the margin for the smaller cohort of multi-property owners it was built to catch.
Does land tax get passed on to renters?
No study we could find settles it. In an August 2019 InDaily opinion piece, James Atkinson of SGS Economics and Planning argued the reforms were unlikely to raise rents, because rental supply responds little to rent changes and landholders would likely absorb the tax in the short to medium term (SGS Economics and Planning, 20 August 2019). That piece rests on economic reasoning and cites no Adelaide rent data. Industry groups argue the opposite, as set out above. Neither position has been tested against Adelaide data here, which is why this page does not claim either.
What does the current land tax schedule look like?
RevenueSA's 2026-27 schedule, effective 1 July 2026, sets Threshold A at $936,000 and Threshold D at $3,504,000, with the rates applied to those thresholds unchanged (RevenueSA, 2026-27 land tax rates and thresholds). Tax is assessed on site value set by the Valuer-General, and all taxable South Australian land an owner holds is aggregated. Principal places of residence and rural land remain exempt (Piper Alderman, 24 January 2020).
For the wider picture, see South Australia's cost of living and the state's levers, Victoria's land tax and property tax hikes and housing affordability.
What Malinauskas inherited, and chose to keep
The Malinauskas Labor government did not write the aggregation rules. They were legislated by the Marshall Liberal government in November 2019 and were already fully in force — aggregation, the trust surcharge and the phased rate cuts all running — by the time Peter Malinauskas was sworn in as Premier in March 2022. In that narrow sense, the policy is a Marshall government legacy the current government administers rather than authored, and the fairness test this site applies elsewhere cuts in the current government's favour on the original decision to legislate aggregation.
What Labor does own is what it did next. In office since 2022, the Malinauskas government has not moved to unwind aggregation or the trust surcharge, has kept the 2.4 per cent top rate in place, and has benefited from the revenue growth aggregation and rising valuations together have delivered to a budget under other pressures, including the debt load this site examines in its analysis of state debt and the budget. It has also layered its own carve-out onto the inherited scale, extending land tax relief for eligible build-to-rent developments to attract institutional rental supply — an implicit acknowledgment that some forms of rental supply needed a lower tax cost to be built at all. That is a defensible, targeted response. It has not been matched by an equivalent assessment of aggregation's ongoing effect on the much larger stock of existing rentals owned by small, non-institutional landlords — the Denises of Adelaide — who sit outside every build-to-rent concession announced so far.
The risk to the future
A tax base leaning harder on a market it may be thinning
South Australia's Budget now depends more heavily on land tax revenue than it did before 2020, and a meaningful share of that growth is tied not to aggregation's original equity logic but to the same property valuation cycle that has driven Adelaide rents to record highs. If that cycle turns, as property cycles eventually do, the revenue line the government has come to rely on will turn with it, while a price downturn would do little to relieve a rental market whose tightness has other, deeper causes than tax settings. The more immediate risk sits on the supply side. If aggregation keeps pushing small, non-institutional landlords — the kind who hold two or three properties for retirement income rather than for tax efficiency — toward selling rather than holding, and if owner-occupiers rather than other investors buy those properties, each sale permanently removes one home from a rental pool that has had almost none to spare since 2021. Neither RevenueSA nor SA Treasury has published data that would let an outside observer test that risk directly. Until that data exists, the government is managing a policy whose revenue effect it can measure precisely and whose supply effect it can only estimate, in the middle of the tightest rental market the state has recorded.