[RobFromGa]

In the year when you buy a house, you spend much more than your annual income, whether you pay cash or not is totally irrelevant. The tax is paid on the pre-tax price of the house on the day of closing, and you finance it.

[Mojave]

In the year when you buy a house, you spend much more than your annual income

Given the difficulty buyers will have financing a new home purchase for 130% (or more) of the home's resale value, that situation won't occur very often.