Ok, this is nuts. Property taxes are not the way to go. If you would like to dry up your construction industry, kill the tourism industry, and pretty much give all new investments to your neighbours go ahead and implement property tax.
In the US property taxes are out of control. The same government agency responsible for collecting the tax is also the agency that sets the valuation on the property. This allows them to play all kinds of games with valuation and tax rates. Essentially, the taxes go up no matter how much the property is worth.
Being an owner of property in Cayman I can tell you this is not good for any facet of the economy. All it will do is raise the already high rates for rental property and depress the values on that property. Also, there is a covenant that is formed when stamp tax is paid. It is really high but worth it because it is the last time a property owner is dinged by the government. Changing that now really affects all the maths that set the rates for both the price of the property and the rental rates projected.
As an owner the only recourse to offset the property tax is to raise rental rates. This will lower the number of visitors, which will then affect all facets of the economy. Good luck filling restaurants when guests are paying more for rental are or simply not coming.
As a property owner, who gains income from renting to visitors, I would much favour the income tax approach. This allows the payer to control how much they will pay by determining how much they will rent. If I am profitable I will pay more taxes. This is fair and leaves little to bureaucratic manipulation. This also puts the weight on the government to continue to make Cayman a desirable destination.
With property taxes the owner must pay whether the visitors are coming or not. If visitors are not coming because everything is more expensive the owner is still required to pay the tax. If there is no income, the owner is still paying the tax. How fair is that?