As I understand it, there would be a sales tax on new home sales, not used home sales. One benefit is that goods would be taxed only once, rather than multiple times throughout their life of use. Another point is that the tax is only applicable to the goods (house) not the property that had been previously taxed.
I'll defer to the experts for specifics.
You are correct, basically you are paying for the taxes on the materials and the labor used to build the house, landscape, etc.