Well, taxing borrowing as income is not what is being discussed here though. It would be workable to make borrowing against an asset at a certain value equival

Well, taxing borrowing as income is not what is being discussed here though. It would be workable to make borrowing against an asset at a certain value equivalent to crystallizing any gain on that asset, pro-rated on the amount borrowed: you own a 2M house, that you paid 1M. You borrow 500k against it, it would be as if you sold 1/4th of it and you would pay CGT immediately on the 1/4th of (2M-1M); the basis would be adjusted so that when eventually you sell the house you pay CGT only on the yet-unrealized gain.