Inflation is just the beginning. Imagine you own a house which you bought 10 years ago for $500k and is now worth $1 million.
You change jobs and need to move, sell your house, pay say $100k CGT (for the 500k you made) and have now only $900k to replace your $1 million house. You have to downgrade for your next house. How is this fair compared to e.g. your neighbour who can live in his $1 m house without paying taxes who prefers e.g. to collect the doll instead of moving and paying CGT?
You buy shares and the company you bought crashes. Can you deduct this loss from your capital gains in your house? Over which time? What if you don't want to sell your house but have this capital loss in shares? How would it be fair that you have to pay taxes for capital gains but any losses are all yours?
You sell the house below market value to a relative or friend or your trust or your company ... can you deduct your losses from your tax obligation?
You sell your house to a company you own ... and sell then shares in this company. How is CGT calculated? Do you see a potential for a loophole?
You buy the house above market value ... and make a loss when you sell - s. above. What if you received an undocumented kick back when buying the house?
The administration of any CGT would be an expensive nightmare, it always would be unfair to some and you could drive trucks through the loopholes. Official property values might even drop (have a look e.g. at Italy), but it would be pretty difficult to buy any property at he official price.