If you are borrowing to buy the house in the first place, then all of the capital gains have already been taxed, so it's not analogous to this scenario.
Depending on the housing market a property price could rise that much while still under mortgage and not everyone pays mortgages off in term.
The fundemental issue with tax law imo, is that tax lawyers write it and the spend years in the dark offering their services to bypass it.
It would be like there being a category of specialist lawyers who openly offer hidden options to murder people.
It really is quite bizarre in my opinion.
We already have definitions of what realized and unrealized capital gains are and we already have the rule about how much capital gains on a primary residence are exempt from taxation.