That's part of the reason for that "at least for small to reasonably large lots" exception I made. Suppose there is a tax, but it's progressive (by square-foot

That's part of the reason for that "at least for small to reasonably large lots" exception I made. Suppose there is a tax, but it's progressive (by square-foot), so you pay ~0 for your first house, a bit more for your second, and so on up to some maximum, same as income tax. That should make speculating on the future price more costly, and so reduce speculation - a bank/investor would probably be paying the maximum tax.