I understand the logic of it, my point is that this is a trust/honesty based system which leaves you cornered. Here are some problems with it:

• placing a low value on my house to pay less taxes exposes me to a hostile buyout
• placing a realistic (e.g. around average for the region) price doesn’t solve the previous problem. I’m still in danger of a hostile buyout, while also paying higher taxes. What’s more, even if everyone else plays fairly, this additional % someone else paid to take my house is now the minimum added on top of their own valuation, driving prices up.
• placing an unreachably high price would bankrupt me as I can’t pay the taxes, so there is no scenario in which this works out for me
• given a realistic and unequal economy, there will be those who can’t afford to place a higher price on their house, i can just go and buy them out on sale, then rent them back to them (that one might sound familiar)

The fault in your assumption is 1. that this would discourage corporations from buying up; and 2. That you live in an equal and just society;