What that allows you to do is more aggressively tax the land--faster readjustments, and with a much higher tax rate. To the extent you do this, you incentive more efficient land use. But in practice jurisdictions don't do this. If you read the literature on Pennsylvania and Mexicali it becomes clear that this isn't politically viable, and so LVTs there are watered down w/ tons of exemptions and a very skittish assessor's office, and don't actually behave much different than regular property taxes.
Lo and behold, when I dig up the details on Estonia I find the same thing. AFAICT, 1) principles residential homes are exempt (specifically, the land the principal residence sits on). 2) The tax rate is capped at 2.5%, but can be as low as 0.1%. I'll bet that property reassessments in Estonia aren't particularly aggressive; but even if they were, 2.5% isn't very much for just the land value. The median rate in the U.S. is 1%, but that includes land value and improvements; and is as high as 2% in some places.
LVTs just aren't politically viable. When a property assessor's office is faced with reassessing the value of land in a way that forces existing homeowners to sell, they're just not going to do it. And even if they tried, a pro-Georgist LVT assessment tends to be much more speculative because they need to guess what could be built on that land, not what is actually being built nearby. Where they've tried to do that, you either see corruption, a "reluctance" to reassess (see Mexicali and elsewhere), or voter revolts. This is very much how California got Prop 13--the fear of reassessments forcing people out of their homes.
Don't forget, a regular property tax can also be used to promote densification. In theory it's not as efficient, but in most cities vast swaths of land have uniform density, so this efficiency concern isn't implicated nearly as much. And yet, predictably, attempting to use property taxes for social engineering always falls flat. Threaten the [perceived] security of family and retiree homeowners and see how well you do in the next election. All the promises of a better, more equitable future won't save you.
I bet if you look at how LVTs are implemented in all those other countries given by Wikipedia, you'd see the same thing: an LVT in name only, a pliable assessor's office, giant loopholes, etc.
The cost of housing would have to infinitely keep growing if we expect every generation of homeowners are guaranteed a lucrative ROI when they retire. I don't understand how that would be sustainable other than a "Après moi, le déluge" mindset expecting the later generations to pay the bill (yeah, literally our pensions included). This problem is even compounded when considering the consequence of the HGT (the Henry George Theorem).
I am already getting a bit struggling to afford a home that is not as good my parents' even though I have a much higher-paying job. But I can't imagine how my children are going to afford it without my financial aid or they have to move to somewhere cheaper.
That said, I somehow agree with you regarding the political aspect, which probably needs a profound wisdom to figure it out.
I hear this complaint a lot about Singapore, especially from Australians, who seem to forget that most of SG's 99-year leases are until the 2070's.
Meanwhile nearly every single property in the Australian Capital Territory has its 99 year lease finalised in the next decade. Most Australians generally don't want to have an honest conversation about those people returning their homes to the government and seem to pretend the leasehold system doesn't even exist.
I get the feeling that leasehold and the returning of property to their rightful owners won't stand up well in a democratic society where the majority decides.
As you said, it's going to be interesting when these start to "expire" in large quantities. What the conversation has been in Singapore so far:
- the gov't will "buy out" the remaining lease for some developments and put up new housing. Existing owners will get a payment and a new subsidized house. However, the gov't has said this will be rare (the problem was when this started is people assumed all owners would get this deal so housing prices jumped, even on properties with little lease life left).
- if you do an NPV analysis of the value of a 99-year lease, it's pretty much worth the same as a freehold lease for the first couple of decades, then it starts to be priced as a true lease - e.g. what would the NPV of renting it be for X years? that's the purchase price. So if a home rents for $3k per month and has 2 years of lease left, the purchase price would be $72k (minus any time value of money)
- the Singapore gov't has also said that it will be proactively initiating the lease-end process 5-10 years prior to avoid masses of people dealing with expired leases at the same time.
EDIT: while Denmark and Singapore are considered very expensive places to live, the rent in Denmark is actually cheaper (while Singapore could be forgiven to some degree due to the country's high density).