What you're leaving out of the equation though is that often times people that old who have lived here forever either have their home fully or mostly paid off. Sure it likely appreciated quite a bit, but depending on their savings, they may not be able to afford a new home in the area at market rates regardless of the tax situation, especially if they are retired and on fixed income. So instead they stay in their home and don't sell. Or they pass it on to the next generation who doesn't sell.