It's based on the reality that people tend to buy houses based on the monthly payments they can afford, and property tax influences that reality. The old person living in a house may be paying the same amount of money in property tax:
It puts a general price pressure on decreasing housing prices. I would also put a much higher property tax rate on long term unoccupied property to increase rental supply to further decrease property values. California with it's relatively low property tax schemes favoring older people pays for it in overpriced property prices.
$1'000'000 * 0.005 = $10'000/yr $300'000 * 0.015 = $10'000/yr
It puts a general price pressure on decreasing housing prices. I would also put a much higher property tax rate on long term unoccupied property to increase rental supply to further decrease property values. California with it's relatively low property tax schemes favoring older people pays for it in overpriced property prices.