 You pay $400,000 today. Two years from now, you sell it for $600,000. You made $200,000 tax-free. And now your basis is $600,000. And maybe a few years later, you sell that home for $800,000. There's another $200,000 that you get tax-free. Now you have an $800,000 home. Keep in mind that you've made that money and your mortgage should be staying pretty flat. So your $800,000 home shouldn't have much more mortgage on it than what your original $400,000 home.