That might discourage some of the foreign investor activity, but unfortunately I don't think that will make a significant difference on keeping price increases

That might discourage some of the foreign investor activity, but unfortunately I don't think that will make a significant difference on keeping price increases in line with income. To give you a real world example, NYC's Long Island suburbs are notorious for having some of the highest property taxes in the nation (mostly the school taxes). Despite this, LI home values continue to go up at a pretty high rate, an average/very basic starter home is around $500-600k. This is because despite the high property taxes and not great weather, the demand for homes there highly outpaces supply. In the case of Long Island, the demand is due to things like having easy access to NYC's huge job market and NYC itself, the quality of schools, low crime rate, etc. For you to make property taxes high enough to make a meaningful dent in demand, they'd have to be so high that any decrease in the cost of the home would essentially be cancelled out by the astronomical property taxes. Time and time again, the root cause of high home values has shown to be that the increase of supply isn't keeping up with increase in demand. To fix that, the factors slowing down new supply need to be removed. These factors vary by location, and include things like a slow/expensive permit process, overly restrictive zoning, allowing NIMBY groups to slow down or block new development with constant town hall meetings, etc. In the case of the crown jewel of places that are horrible at keeping up with housing demand, California, all 3 of those are at play simultaneously, and the housing costs there show it.