It would just become another variable in pricing land. It would actually slow down appreciation because taxes would have to be priced into every transaction. You can't borrow against collateral you don't have, so lenders would obviously calculate the appreciation taxes due if they need to foreclose.
That’s not true, because appreciation isn’t uniform in a housing market. Not everyone experienced the same value gain, so your tax bill might be hundreds of thousands of dollars while your neighbor’s tax bill might just be thousands of dollars.
This is also why capital gains taxes don’t get priced into equities and securities.
Markets don't move by magic. They move by the aggregation of thousands and millions of transactions. And yeah, sellers and lenders absolutely incorporate their taxes into prices.
I see what you are trying to say about capital gains taxes not being in the "price" of securities. But they are in aggregate because taxes inevitably have to be paid. The whole market can't go up without transactions pushing it higher. And all transactions that make profit get a portion pulled out for taxes. They quite literally act as a damper on how fast a market can move.
I don't follow that. Suppose the tax was 100%. Real estate would effectively never appreciate, so no one would hoard it. If the tax is 0%, then it's a completely "free" market. Anything between the two just reduces the ROI.
Since a high ROI in the short term promotes speculation (and not development), it seems like this would reduce speculation and the likelihood of bubbles forming.
Of course that's a ridiculously oversimplified view. There are a zillion different ways to stack this, which is what would happen in any case. To spur development and not just buy-and-hold, the law might be written to exempt certain kinds of improvement costs.
