Yes -- taxing on the estimated full value of the property is a very common thing. Almost universally the case in the US as well. And you can use previous sale values and assessments to try to get what seems to be a market valuation.

Two problems though. One is that this is very anti-Georgeist; the main idea with the school of thought is that you should not be penalized for improving the land; you do not want counter-incentives to land improvement, because that's a net negative for neighbors and for society.

The other is that this process is very very very bureaucratic and corruptible. I can see for myself how this manifests in places I've lived because the estimated value for tax purposes is so wildly different than the actual sale price of real estate. I can't speak to NZ specifically as to how much of a problem this is and how it is addressed, but I'm going to go out on a limb and offer the hypothesis that it is poorly addressed and there is a big divergence between the estimates and the sale prices for real estate. Prove me wrong!