> In Seattle, where the housing market is considered expensive, a 1.2m house only pays $7k in property taxes

Only if it has (a) an exemption or (b) an assessment well below market value. A typical house with a $1.2 million assessment will have paid over $10k in property taxes in 2022.

All properties assess below market value, even new construction. A 1.2m house will generally assess for around 800k.

That would be option (b) in my comment. Washington State law requires assessed values to be 100% of "true and fair value"[1] despite the fact that they tend to lag market value.

[1]: https://apps.leg.wa.gov/WAC/default.aspx?cite=458-07-030