How much fraud we talking? I like to think along Matt Levine's ideas that at least some amount of fraud is acceptable - there will always be some amount of it and under or over-regulation creates a net-negative.
For sure. Probably should be using the total homestead exemption eligibility as the denominator instead of prop tax receipts. Even then transfer tax is a "hill" and the homestead exemption is a "valley." But It's hard enough to estimate any of this data from a keyboard in a few seconds
-NY state estimate $150–200M per year lost to real estate transfer tax fraud and evasion. On $3B receipts that is 5-6% breakage.
-Harris County (Houston) found $21M in improper homestead exemptions. On ~$7B receipts that is ~0.3% breakage
-Miami-Dade found $35M on $6.5B for improper homestead exemptions, 0.5% breakage
For comparison, IRS net tax gap is about 12%