Property taxes do not take into account the amount you paid for your house, so they are not a tax on unrealized gains since the gains are not calculated. You could be underwater on your mortgage and you would be taxed just the same.

Property tax is a straightforward wealth tax on a certain class of asset, not a tax on appreciation.

Why isn’t every person defending this idea mentioning this fact. It’s so obvious once you mention it.

Except (sort of) California

Also, there is a real debate to be had about if housing should be primary considered an investment or a basic need by society. Many argue that the focus on housing as an investment in the US is a primary driver of our housing problems.

Property tax is very unpopular, at least where I live.

Nope it is not. Property tax does not take any gains into account - it's tax on full value (with possible exemptions) not gains, you pay the same regardless whether you bought it for $1 or $1M. Except of course in California where they have this weird scheme which led to the fact that my next door neighbor paid less than half of the property tax I did for pretty much identical house (because they bought it in the 80s) - which looks like negative tax on gains.

> Taxing unrealized capital gains already isn't all that radical -- property tax is effectively a tax on unrealized gains of property value, and essentially every municipality has that tax.

Property taxes are a use tax (roads, police, fire, schools, etc), apportioned base on property value, it is not a capital gains tax.

In addition to what everyone has already said, property taxes paid are also very explicitly deductible from income taxes. They’re more like an indirect transfer from the Federal government to municipalities, and don’t necessarily result in a substantial aggregate increase in tax burdens.

Deductible modulo SALT cap.