How is that the case now, though? What taxation regime are you thinking of?

Not sure I understand how it is basically like today?

It disincentivizes ownership of anything but the most high value land use. Unless there are a lot of regulations (like today) limiting use of land in particular areas, the highest value use version of housing might not be great to live in (if housing were even to be the highest value use in a lot of places).

For example, the current condo in a 40-story tower might well be far less valuable than some tiny serviced flats.

Efficient use might be a very unpleasant target to go for.

Maybe the first paragraph could have been written less sweeping?

What how does that concept work in poetry or lyrics, for example? Something could be completely fictional (and artificial) and still be exceptionally well written.