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That's how it is here in Belgium. I pay tax on the income I would get if I would rent out my apartment, even when I'm actually living in it.
Luckily the amounts are based on rent prices as they were in 1975. It's indexed, which means it gets adjusted for (general) inflation, but not for the increased prices in the housing market which is much higher than inflation.
A penalty for units that have been vacant longer than 6 months makes sense.
Units need to be rehabbed, but keeping a property uninhabited for long periods of time should have a disincentive tax applied to them.