In Malaysia, Singapore, and Hong Kong (all common law jurisdictions) leaseholds are more common, I think, than freeholds, at least until very recently. Leasehold estates are commonly 99 years or less (50, 60, 75, etc).
I don't know how well this works (I only have a superficial knowledge of the property market from my travels and relations) but I imagine it becomes a problem when you have major improvements. For example, imagine a condominium. As a political matter the government isn't going to kick out 100 tenants just because the leasehold on the land terminated. So I suspect that in terms of revenue the governments are no better off than relying on property taxes. In the few cases I'm personally familiar with the typical scenario seems to be that the government offers renewal terms at a highly discounted rate a couple of decades before the lease expires. It seems like a pointless contrivance.
Certainly freeholds are nicer from the perspective of efficient markets because you don't have arbitrary dates to contend with. Imagine trying to sell land with only 10 years remaining on the leasehold. The seller can expect very little, which is to be expected and not per se problematic. But more importantly 10 years limits the types of things you can use the land for, especially if you're risk averse. In general buyers will find it difficult to find land with a remaining term long enough to recapture the value of improvements, so liquidity would suffer significantly. Seems to me property taxes are a much simpler, more consistent, and theoretically fairer way for governments to capture the value of land. And that's ignoring Henry George-style land-value taxes.
I suppose leaseholds may make it easier for governments to actually kick people off land if they're committed to doing so. The end of the lease is a nice, neutral date to implement some difficult policy objective.