The municipality charges all residents for all services provided. Citizens vote on which services are provided to them, and which they will have to pay for.

The payment obligations are progressive by necessity, and indexed to assessed property value as a practicality.

The municipality does not care how much equity you have in your house, or how much wealth you have in other assets, or how much income you have.

Your property tax obligation is the same, whether you have unrealized gains or not. It is therefore obviously not a tax on unrealized gains.