http://www.citylab.com/housing/2015/05/why-billionaires-dont...
The whole tax penalty is thwarted that way
We still have structural problems in the city property tax code -- for example condo and co-op buildings have to be taxed as if they were rental buildings, a complex calculation that generally undervalues them. But if and when those are fixed, I think full property taxes are would be enough. I don't see the need for a punitive rate on top of that. At least not in NYC, other cities may have a bigger problem with absentee owners.
"In the evenings an eerie stillness settles on [the area]. That’s because these new owners are so rich in both money and global property that their London addresses frequently sit empty, functioning more as dust-sheeted deposit boxes rather than actual homes."
This is not why we have cities. We have cities to allow interaction. Look where the artists, musicians and marginal people are going, for they are the new thing. Hint: it isn't London.
I'm going to throw out Nashville as a thought for musicians, and maybe Pittsburgh for tinkerers.
Now there's some interest in the cheaper seaside towns - Margate, even Bournemouth.
Brighton used to be on that list but it's almost as expensive as London now. Likewise Bath and Bristol. (Not seaside towns, but a big arts scene in the 60s and 70s, now very much gentrified.)
I suspect if people can't get out they'll head West and North. Parts of the West Country are almost affordable. Parts of the North are very affordable, but they're still in the dilapidation phase and don't seem to be in danger of becoming cool yet.
The idea of a tax virus sounds terrifying!
What happens when the bubble pops?