Property tax boosts social welfare by encouraging durable-goods monopolists to sell.
This article looks at how a property tax affects a company that sells durable goods. The researchers found that a property tax can actually increase social welfare when people don't value future benefits as much. The tax makes the company spread out production over time, leading to more products and better social welfare. The company might choose to only produce in the first period if costs are high. And even with no production costs, the company might still choose to sell instead of lease because of the tax.