If we only taxed land, renormalizing for the same total taxes:
1. It would be much more expensive to hold (absolutely or relatively) undeveloped land as an investment that parasitically increased in value due to surrounding investment.
Land is the exclusionary resource, so fully taxing it makes sense.
Renormalization would tax unused land hard, reducing its passive return, and the supply & availability of less used land will increase, and prices decrease.
2. It would be far more attractive to further develop land for economically rewarding use, since adding living spaces and other increased use would not directly raise annual taxes. Which today are essentially a heavy disincentive to development.
Ironically, property (excluding land) taxes, are a recurrent never ending wealth tax, inhibiting both the wealthy and non-wealthy from increasing their properties utility value.
We are so used to it we don’t really consider how much it warps our choices that putting in capital or labor into home improvements or increased multi-housing actually raises our taxes.
If they didn’t, improvements would be far more attractive for both utility and property value appreciation.
Ask any accountant.