I don’t think the state would need to “pay those who have large luxury homes to part with them”.

The world you propose, which I agree is more than likely to be necessary, would have to be very socialistic. A vastly reduced population would be very dependent on each other to survive. Hoarding and wealth accumulation would be harmful — well, it’s harmful now, but we ignore that.

It’s a right fine mess we’ve made of things, isn’t it?