That's more like the US system of handling CGT on the principal residence house. Since mortgage interest can be deducted of the individuals taxable income, it's expected sooner or later the capital gain on the home will be recognised. But on most part, MOST Americans pay no CGT on their home as 'death / estate taxes' don't normally apply to the common individual - you have to be in excess of $12 MILLION in assets before those taxes apply.
Watch out NZ, the Labour + Greens will form some way to tax more from the haves.