“he can package the 3% deduction into the sales price and then rebate the buyer afterward…”

The buyer still has to pay property tax on the higher amount, which is what shows up on the county sales record, so the “rebate” is less than it should be, all things considered.

This is the same flaw in logic that shows up when people throw a “free” car into a house sale. The buyer gets the car, the overpriced house, and the property tax bill on the overpriced house. Far better to knock down the price of the house and buy your own damn car.