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You get the money right away and depending on the loan terms you may only have to pay interest for a while so you might be able to effectively get the value of
by scheme271 3y ago
You get the money right away and depending on the loan terms you may only have to pay interest for a while so you might be able to effectively get the value of the asset at rates that are much less than capital gains. E.g. capital gains mean that you pay 20% if you sell some land but if you get a loan against the land, you can get the value of the land at 5% interest. If the value of the land keeps going up you may be able to keep refinancing it for a while.
- dataflow 3y agoThis makes... no sense? You have to pay back the loan on top of the interest, it's not like you got that money for free at a lower tax rate. Whereas if you sell something the proceeds become yours. How in the world is that a "loophole"? It's not like there's any guarantee you'd end up paying less in interest than if you'd bought bonds or left it in a bank account or something. You're risking your money, whether you make a profit or not isn't guaranteed. That's not a "loophole", that's by-design and a feature that's available to everybody.