If the replacement cost of the home is $200,000 and the sales price is $500,000 due to land scarcity there is a rent or excess value of $300,000. The rent is paid to the seller through surplus asset gains due land price appreciation and to banks through surplus interest payments or usury due to the capitalization of ground rent in real estate asset price.
> Market forces create sustainable economies.
There is no free market for land and money, these are social factors of production recognized by the state to help independent agents coordinate production. When banks lend against the present value of future rents the borrower is pledging the surplus labor of future generations of residents as collateral. In the ancient era this resulted in people being sold into debt slavery, which is why religions sought to establish various rules concerning land reform and cancelling debts.
> an additional dollar in tax reduces the net asset value by the inverse of the tax rate (e.g. $1 in tax revenue at 1% => $100 value destroyed)
Direct taxes on land can actually help discourage freeholders from holding land off the market forever if it is properly assessed, which can reduce excessive capitalization of ground rent in asset prices and reduce the long term rent and debt burden.
Taxes on excess value and rents which are spent back into circulation on infrastructure can increase real capital values and wages.