The point is that it would incentivize them to sell condos instead, which are then tax-privileged.

And how does that help people who don’t want to commit to buying a house? The end goal should be affordable housing not home ownership. Buying and selling a house has high transactional costs and definitely shouldn’t be the go to. If you need to change jobs, it’s much harder to move if you own a home.

Besides, “owning” a condo when you still have all of the issues of being in an apartment is not ideal. You are still dependent on the condo association to fix common parts of the building , it needs to be a well run association, you have to deal with neighbors and shared walls etc.

Regarding the "owning a condo not being ideal", it's actually the norm in many countries, assuming by "condo" you mean a flat in a shared building with many houses - where I'm from, condominium is the name you give the association of neighbors, not the structure. Almost 50% of the EU residents live in flats[0]and have to indeed communicate with their neighbors and solve common issues together through a management company or directly through the owners association, depending on the building. I think you're making it out to be more complex than it is.

[0] https://www.weforum.org/agenda/2021/07/flats-houses-types-ho...