I tried to have an interesting discussion, I swear!
Of course!
This was not intended to be viewed as a hypothetical. This is a prominent cornerstone of our culture as human beings. We have a societal structure that functions as a result of territorial control. It isn't a black and white memory of ancient times. The Russian government is very publicly trying to expand their territory, as we speak right now. The same can be said for the Chinese government and Taiwan, or Hong Kong; again, at this very moment.
It bothered me that we, as people, are born into a society where one family holds indefinite control of the majority share of Earth's real estate. That being said, let's try the 'explain it to me like I'm 5 years old' that's a good idea. I'll try to keep things aligned with the examples in your post:
So, yes - You purchase a home from another citizen. Your money is transferred from your account to their account. The Crown Estate gets a percentage of the transaction, depending on the value of the property and the length at which the previous resident owned the property. This, occurring among every real estate transaction throughout the Crown Estate's 6.6 billion acre territory, adds up to quite a sum. Property owners also pay a Property Tax, annually. In the United States, this money is managed by a congressional body. However, the Windsor's are the people that collect the tax on their land. This is orchestrated through the Crown Estate. The Crown Estate is meant to act as a foundation for the government over that same territory. In other words, all of those taxes go to the Crown Estate - The Crown Estate redistributes the taxes for public purposes: public employees, road repairs/infrastructure, things like that.. However, the Windsors are still entitled to their interest on the land that you lease. So they are awarded a Sovereign Grant: This amounts to hundreds of millions in direct payments to the royal family each year. Because it is the 'Queen's territory,' that grant is not taxed; why tax herself?
Think of it like this: You own every property on the Monopoly board and you've built a hotel on every space. The only way that you can keep that system working is by giving the players enough money to consistently pay the rent with every roll. In this way, the money has no value to you because you own everything, including the money. But to the players, it is everything.