I find you'll theories most interesting. When I read the book, I always figured Voldemort had bought it after he murdered his father and grandparents. After all it was aparently abandoned after Voldemort failed in his attempt to kill Harry. By the way where I live in the United States, as long as the taxes are paid, the city cannot take over an individual's property. They can tear a building down if it is deemed a hazard to the community. Considering the house had a large yard and was pretty much by itself, I doubt the village would bother tearing it down.