That's just property taxes in a nutshell, though. We periodically see discussions about land value taxes and it's a feature of those as well; proponents shrug and point out that you didn't do anything to earn that extra value so it doesn't belong to you anyway.
I'm not taking a position here other than to say I don't believe there is a universally acceptable tax. Every tax I've ever read about or experienced personally, someone has made a valid argument for why it leads to a bad outcome or is otherwise unfair. You have to decide what gets priority, pick the system that matches that, and then be honest about where you're making tradeoffs and why.
But property tax is just absurd.
The property was purchased with "after tax" money. So at purchase date the value was already taxed.
If one sells, and make a profit, we tax that profit. Why ask for a tax on the value of the property, each year.
There should be local taxes, and there are. To fund services and whatnot of course. But taxing a percent of the current value of a property is unfair as the owner may live in there with no intention to sell and potentially no revenue whatsoever.
Why is it unfair to tax a property that is receiving services at a rate proportional to its value? One part of the value of the police service this is paying for is for protecting your property, and certainly that is more valuable the more valuable your property is.
And one value of property taxes (one that is dysfunctional on empty lots) is that it encourages "maximum" use of high value property (lots of bad particulars here, but the overall direction is about right). While we may dislike an elderly person being effectively forced out of the home they have lived in for decades, it is usually for more "productive" uses (for the market definition of productive).
As an example my in-laws have three properties in Hungary that are empty, and have been for quite a few years. Cumulatively they get something like ten weeks of use in a year. But since Hungary does not have property taxes there is almost no incentive to make better use of these properties (yes, they could rent them out for an advantage, but there is no disadvantage pushing them to sell).
Isn't all money "after tax" though? It all goes around. The exception would maybe be the treasury minting loans.
Everything is unfair. The housing crisis is unfair. Young families struggling to afford a family home is unfair. Having to pay into a pension system you'll never get to use is unfair. Land and housing is different from personal property. There's only so much to go around and we'll have to share. A property tax is one tool to incentivize efficient allocation, and to drive prices down.