If I roll over a personal loan repeatedly of any amount, should I be taxed? This seems a matter for the lenders' appetite for risk, and nothing to do with the government.
If you are using a collateral, you and your bank are basically valuing it and realising some gain from that value.
Well, there's also risk. I can remortgage my home and get money now, with the promise of paying it back later. But I might not pay it back if I lose my job.