A tax regime that replaced capital gains taxes on domestic property and financial securities with a 1 or 2 percent wealth/property tax would be superior to both the current regime and a universal wealth tax. This would also apply to primary residences which are often capital gains exempt.
Suggested by steven.noble
Why this is a good idea for land property?
First, a capital gains tax on residence is a major drag on the economy because it is a significant inhibitor on mobility, and there are good reasons to believe that worker mobility produces a lot of value. But if you only have this one carve out it acts as a feedback loop in accelerating prices because if prices are appreciating at all it becomes the most attractive place to put all your available investment finances, including leverage. It also inhibits other uses of land, eg creating rental suites from part of the home (at least in Canada, if you create a rental suite then capital gains applies proportionally).
However, the elimination of capital gains is surrendering a lot of government revenue to people who have means to pay. So it can be recaptured with a substantial property tax. Furthermore, a large enough property tax will push purchasers to treat home selection more like a car purchase where they don’t just select the most valuable home they can afford. The tax dollars on the home behaves like depreciation on the car. Both mean a more expensive choice competes against future consumption.