The proposed fines for trying to defraud the system are much higher than paying the 1%/year tax. It's like parking: pay $5 to park for an hour, or take a 1 in 5 risk of a $100 fine. Most people pay for parking.

EDIT: and the goal isn't to make revenue, it's to free up rental stock. If all the money collected goes towards enforcing the system and 20,000 vacant units end up in the rental market, then the policy is a total success.